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INTERENSHIP REPORT STATE BANK OF INDIA INTRODUCTION:- company profile State bank of India is the largest and one

of the oldest commercial bank in India, in existence for more than 200 years. It is the state owned corporation with its headquarters in Mumbai. The bank provides full range of corporate, commercial and retail banking services in India. The government of Indianationalised the imperial bank of India in 1955 with the reserve bank of India taking a 60% stake, and renamed it the state bank of India. In 2008 the government took over the stake held by the reserve bank of India. SBI has been ranked 285th in the global fortune 500 rankings of the worlds biggest corporations of the year 2012.

As at December 2012, it had assets of US$501 billion and 15,003 branches including 157 foreign offices making it the largest banking and financial services company in India by assets.

The bank traces its ancestry to British India, through the imperial bank of India, to the founding in 1806 of the bank of Calcutta, making it the oldest commercial bank in the Indian subcontinent. TOP PERFORMING PUBLIC SECTOR BANKS: Andhra bank Allahabad bank Punjab national bank Dena bank

Vijay a bank

BANKING BRIEFS-

DEREGULATION OF SAVING BANK DEPOSIT INTEREST RATERBI deregulated saving bank deposit rate on October 25th 2011. The apprehension from banks perspective that deregulation might lead to increase in rates may not be valid based on the past experience of deregulation of interest rates on fixed deposits. Hopefully, deregulating interest rates will act as the much needed catalyst for growth of saving habit in the country.

DIRECT TAX CODE-

DTC has been planned to replace archaic (many of them obsolete) laws related to direct tax, such as income tax, dividend distribution tax and wealth tax. End of most of the exempted incomes, rationalisation of savings, few modifications in tax slab (same already proposed in budget 2012) and of surcharge on income tax.

EEE benefit only to provident fund, retirement fund, NPS, pure life insurance and annuity scheme.

EUROZONES CRISIS-

The global recovery is threatened by intensifying strains in the euro area and fragilities elsewhere. Financial conditions have deteriorated growth prospects have dimmed. And downside risks have escalated. Growth in emerging and developing economies is also expected to slow because of the worsening external environment and a weakening of internal demand. In other major advanced economies, the key policy requirements are to address medium term fiscal imbalances and to repair and reform financial systems, while sustaining the recovery. In emerging and developing economies, near-term policy should focus on responding to moderating domestic growth and to slowing external demand from advanced economies. FISCAL DEFICIT Fiscal deficit = [total expenditure-(revenue receipts+ recoveries of loans+ other receipts)] Fiscal deficit is 5.9% of the GDP during 2011-12 High level fiscal deficit affects the exchange rates, interest rate and inflation.

MACRO ECONOMIC AND MONETARY DEVELOPMENTS IN 2011-12: RBI REPORT Even with economic slowdown in emerging economies and recession in euro zone, global economy is unlikely to tumble into another recession. Global uncertainties and domestic cyclical and structural factors lowered the growth to below 7% in 2011-12. The growth slowdown has been driven by a sharp fall in investment, some moderation in private consumption and a fall in net external demand. Generalised price pressures softened as growth deceleration eased demand. MONEY MARKET IN INDIA It is a market of short term instruments (maximum up to 1 year). This instrument helps the business units, banks, other organisations and the government to borrow funds to meet their short- term liquidity mismatch. Call money market, treasury bills, commercial papers, certificates of deposits, repo market and CBLOs are important money market instruments.

NEW BANK LICENSING POLICY New banking license is overdue as last license were issued almost a decade back in 2001. It was also announced in budget speech for 2010-2011. RBI has issued drafts guidelines for new licenses. Promoters / promoter groups (of residents only) that have a successful track record for at least 10 years in running their businesses shall be eligible. New banks will be permitted only through a wholly-owned Non operative holding company.

The aggregate non-resident shareholding from FDI, NRIs, and FIIs in the new private sector banks shall not exceed 49% for the first 5 years from the date of licensing of the Bank. RBIS MONETARY POLICY STATEMENT 2012-13 To give a fillip to economic growth, RBI has cut the repo rate for the first time in 3 years, repo rate reduced by 50 bps from 8.50% to 8.0%. No change in CRR.

This policy has been taken steps to improve the growth rate. It is time for the fiscal and financial reforms to keep the momentum. ASSET- LIABILITY MANAGEMENT It involves management of a banks assets and liabilities.

It essentially focuses on managing risks caused by change in liquidity, interest rates and fluctuations in foreign currency rates.

Success of ALM depends on availability of information, existence of sound policies and risk management system. BANK EXPOSURE

Banks during the course of their normal business take exposures on their counterparties including banks.

Exposures assumed on the banks are called exposure.

Country risk is a vital factor for assessment of bank exposure for foreign banks along with credit risk. CONCEPT OF HOLDING COMPANY, BANKSUBSIDIARY AND BRANCHMODEL

A holding company is a company or firm that owns other companies outstanding stock.

Banking holding companies:- the one which owns or controls one or more banks. This one is easy to regulate by a single regulator.

Financial holding companies:- the one which owns or controls banks and non- bank financial companies as well. GREEN BANKING

Green / ethical banking implies socially and environmentally conscious banking.

It includes ethical investment, socially responsible investment, and corporate social responsibility.

Green banks have the potential to create environmentally and socially conscious business practices.

They can introduce pricing differentials for units that are following environmentally sustainable business practices and change more for units that arent doing so.

Banks have been surprising slow to examine the environmental performance of their clients. They must consider performing a triple bottom line analysis of their borrower customers.

DEPARTMENTS IN BRANCH

1. Cash department 2. account department

Cash department includes Chest branch- in compliance of RBI instructions for note processing at currency chest branches.

VERIFICATION OF CURRENCY CHEST BALANCESMETHODOLOGY1. Periodicity- Bi-monthly-

The balance of each currency chest should be verified at least once in two months by an officer not connected with the custody of the chest.

Two % of the balances in each denomination of rs .100/-, rs.500/- and rs.1000/- may be verified through note sorting machines. 2. Periodicity half yearly-

The balance are to be verified once in six months by the officials from the controlling office of the bank by packets & bundles and five per cent balances in all denominations should be verified through note sorting machines.

hand balance branch-

Account departments includes loan departmentLoan department provides services regarding advances.it helps in providing different types of loans like car loan, home loan, property loan, education loan etc. account openingProvides services of opening of accounts for customers. Clearingdepartment it clears cheque of all local branches of banks (SBI).etc.

PRODUCTS OF SBI

1. Investmentbanking- investment banking is a financial institution that assists corporation and government in raising capital by underwriting and acting as the agent in the issuance of securities.

2. Retail banking- retail banking refers to banking in which banking institution execute transaction directly with consumers rather than corporations or other banks services offered includes- debit cards, credit cards, checking account etc.

3. Commercial banking- it is a type of financial intermediary and type of bank. Commercial banking is also known as business banking. It is a bank that provides checking account, saving account and money market account and that accepts time deposits.

4. Private banking- it is a term of banking, investment and other financial services provided by bank to private individuals industry sizable assets.

5. Asset management- it is the professional management of various securities and asset to meet specified investment goals for the benefit of the investors. Investors may be institution or private investors.

TYPES OF ADVANCES PRODUCTS

LOANS SCHEMES

PERSONAL LOAN- It includes-

FESTIVAL LOAN

PURPOSE We provide a special loan for short term especially to meet the expanses during a festival. The loan is provided at competitive interest rates with zero margin and security. General purpose loan for individuals, Employees of PSUs, Govt. organizations, Profit making public/private limited companies/ institutions. Persons having regular source of income from verifiable channels like pensions and interest from TDRs/NSC/Govt securities, etc.

INCOME: Min NMI Rs 3000/Experience: Salaried: Public & Private sector 2 Years Self Employed: 3 Years

LOAN AMOUNT: Min Amount: Rs 5000/Max Amount: Rs 50,000/-

MARGIN NIL

DOCUMENTS Proof of Identity: Voters I-Card / Passport / driving license / PAN Card. Proof of Residence: Ration Card / Telephone Bill / electricity bill / Passport / Voters I-Card / property tax receipt etc. Passport size Photograph Proof of Income Proof of official address: (for other than employees): Shop and Establishment Certificate, Lease Deed / Telephone Bill. (not required from existing Bank customers)

PROCESSING FEE

1.10%- of loan amount [inclusive of service tax] REPAYMENT PERIOD: Maximum 12 months No penalty for prepayment

Mode of Repayment: For Salaried -

Check off Facility - His Employer will take responsibility to credit the salary to his account at the branch from which the EMI will be deducted) or Post Dated Cheques for the Repayment period given. Or SI from the borrower's salary a/c with our Bank

forNon-Salaried 1) Post Dated Cheques for the Repayment period given. 2) ECS (To Check & then include in content) 3) SI from the borrower's salary a/c with our Bank

SECURITY

Nil - if check off is available Collateral: Personal guarantee of the spouse or any other person of adequate worth where check off facility is not available.

INSURANCE

NIL

OTHER CHARGES

NIL

JAI JAWAN PENSION LOAN

JAI JAWAN PENSION LOAN FOR YOUNG DEFENCE PENSIONER We provide personal loan to the young defence pensioners at competitive interest rates at zero margin and processing fee to meet their personal expenses

ELIGIBILITY

Source of Income: Pensioners of Armed Forces, including Army, Navy and Air Force, Paramilitary Forces, Coast Guards, Rashtriya Rifles, CRPF, BSF, ITBP, etc. Age: Up to 50 Ratio: EMI/NMI <40%

LOAN AMOUNT

48X Net Monthly Pension Subject to maximum of Rs.2.00 lakh

MARGIN NIL

DOCUMENTATION

Application-cum-Authority Letter. DP Note on COS 228 (To be signed by pensioner in favor of guarantor and endorsed by the guarantor in favor of the Bank). DP Note Take Delivery Letter.

PROCESSING FEE : Nil

REPAYMENT PERIOD: Maximum 84 months (Repayment starts 1 month after the disbursal of the loan)

REPAYMENT MODE

Standing Instruction to debit the pension account for recovery of the EMIs SECURITY

Need to get a confirmation on the same Loan Amount < Rs 25,000/-

Loan Amount > Rs 25,000/TPG of Spouse eligible for family pension. In the absence of spouse Third Party Guarantee of any other family member or a third party worth the loan amount. SBI LOAN TO PENSIONER

MODE OF REPAYMENT The branch will deduct the instalment at the time of payment of pension.

SECURITY- Nil INSURANCE - NIL REPAYMENT PERIOD

Age at time of loan sanction Up to 70 years 70-72 years

Repayment period 60 months 48 months

Age at time of full repayment 75 years 76 years

XPRESS CREDIT

Do you want funds readily available to you whenever you desire or need, be it a sudden vacation that you plan with your family or urgent funds required for medical treatment? SBI Xpress Credit Personal Loan is the answer to your questions. Access this facility from over 13000 branches across the country and confidently face the challenge of meeting any kind of personal expenses!! Enjoy the SBI Advantage:

Low interest rates. Further, we charge interest on a daily reducing balance!! Low processing charges; only 1% of loan amount No hidden costs or administrative charges. No security required which means minimal documentationsomething that you had always wanted. No prepayment penalties. Reduce your interest burden and optimally utilize your

surplus funds by prepaying the loan (1% of the loan amount will be charged if you repay the loan before 6 months) Long repayment period of up to 60 months

Purpose - We provide personal loans to the employees of specific companies (mentioned below) at zero margins, low security, very competitive interest rates with fast and easy processing. a) Leading PSUs b) Govt. organizations c) Quasi-Govt. organizations d) Reputed private sector organizations

Eligibility Income Rs.5000/- [may be reduced to 3000/- only if salary A/cs entireenterprise are with us] EMI/NMI Ratio should not exceed 50

Loan Amount Min: Rs.24,000/ Max: 24 X NMI (Demand Loan) with an upper ceiling of Rs.15.00 lacs Repayment Period Min 6 month Max 60 month / 5 years Margin Nil Processing Fees

1% of the Loan Amount

SBI CAREER LOAN

Purpose Financing the individuals: Who want to join short term training, to acquire skills needed to join a job/profession. Eligibility Individuals Who undertake a course for training/skill development? Presently Restricted to persons joining Commercial Pilot training courses Airhostess Training courses In India and abroad, From institutes recognized by the Ministry of Civil Aviation/DGCA

Age Applicant Minimum 18 years Co-borrower Maximum 60 years Margins Quantum of loan Margin Type of Security Land/Building Govt. Securities /Public Sector Bonds, NSCs, Maximum of Rs.20.00 lacs Depends on type of Security Margin 20% 10% on the Face value of the Security

KVPs, Banks Deposits, RBI Relief Bonds etc LIC Policies 10% margin on Surrender value of LIC Policies

Repayment Period 36 months in Equated Monthly Instalments Commencing from one month after date of completion of course

Processing Fees 0.50% of the loan amount to be recovered upfront Security Equitable Mortgage of non-encumbered Residential house/flat, Non-agricultural urban immovable property, Commercial or industrial property In the name and possession of the borrower/co-borrower, i.e. either self-

occupied or vacant. OR Security in the form of Govt. Securities Public Sector Bonds NSCs KVPs RBI Relief Bonds LIC Policy TDRs of the Bank

EDUCATION LOAN SBI SCHOLAR LOAN

Education Loans to students securing admission in:


The countrys best Engineering colleges The nations elite Medical colleges Indias top B-Schools Indias best Law colleges & other reputed institutes

Eligibility

A term loan granted to Indian Nationals for pursuing higher education in India in selected institutions Courses Covered Regular full time Degree /Diploma Courses and not certificate/ part-time courses through entrance test/ selection process. Full time Executive Management Courses like PGPX (for IIMs) are also covered Salient Features

Loan at Campus/ Designated Branch

Option to transfer loan account to a branch closer to the place of coborrower (after the course completion)

ATM-cum-Debit card and Internet Banking facility Second Education Loan for further higher studies provided the institution and fees fall within criteria.

Loan amount Maximum loan amount up to Rs.30 lacs

Category

Maximum Loan Limit No Security, only Parent/ Guardian as co-borrower With tangible collateral of full value and Parent/ Guardian as coborrower

List A List B List C

Rs. 20 lacs Rs. 15 lacs Rs. 10 lacs

Rs. 30 lacs Rs. 20 lacs Rs. 15 lacs

(Loan amount varies with the institute.)

Expenses covered

Fees payable to college/school/hostel Examination/ Library/ Laboratory fees Purchase of books/equipments/instruments Travel expenses/expenses on exchange programme Purchase of computer/laptop Caution deposit / building fund/ refundable deposit supported by Institution bills/ receipts [not to exceed 10% of the tuition fees for the entire course].

Any other expenses related to education

Repayment

Moratorium up to course duration plus six months Flexible repayment period up to 7 years.

Margin

Nil up to Rs.4 lacs 5% above Rs.4 lacs

Security

No Security, only Parent/ Guardian as co-borrower List A List B List C

With tangible collateral of full value and Parent/ Guardian as co-borrower Rs. 30 lacs Rs. 20 lacs Rs. 15 lacs

Rs. 20 lacs Rs. 15 lacs Rs. 10 lacs

In case of married person, co-obligator can be either spouse or the Parent(s)/ Parent(s)-in-law. Parental co-obligation can also be substituted by a suitable third party guarantee.

Documentation Required

Letter of admission Completely filled Application Form 2 passport size photographs PAN Card of the student and the Parent/ Guardian Proof of identity (driving licence/passport/PAN/any photo identity) Proof of residence (driving licence/passport/electricity bill/phone bill) Statement of expenses Student/Co-borrower/ guarantors bank account statement for last 6 months IT return/ IT assessment order, of last 2 years Brief statement of assets & liabilities of the co-borrower Proof of income (i.e. salary slips/ Form 16)

AUTO LOAN SBI CAR LOAN SCHEME Eligibility Between the Age: 21 65 years (for sanction of loan),loan can be granted for persons beyond 65 years who have sufficient, regular and continuous source of income for servicing the loan. Loan must be fully repaid before the borrower attains the age of 70 years. Who are Eligible Individuals Salaried, Professionals, Self Employed, Businessmen, and Person engaged in Agricultural and allied activities. Proprietary & Partnership Firms who are income tax assesses with Minimum net annual income of Rs. 2,50,000/Purpose For purchase of new passenger cars, jeeps, Multi Utility Vehicles (MUVs) and SUVs. Loan Amount Finance for on-road price as against ex-showroom price Maximum: 48 times of Net Monthly Income or 4 times the Net Annual Income. For new vehicles: No ceiling on absolute loan amount Margin Security Processing Fee For All Loans: 15% Hypothecation charge in the books of R.T.O. Rs. 500/- per application till 30.06.2013

Repayment Period Documents required

Long repayment period of 84 months for New Cars for all. 1. Statement of Bank account of the borrower for last 6 months. 2. 2 passport size photographs of borrower(s). 3. A copy of passport /voters ID card/PAN card. 4. Proof of residence- Tax receipts, Telephone bill, Ele bill etc.. 5. Latest salary-slip showing all deductions 6. I.T. Returns/Form 16: for last 2 years for salaried employees and 2 years for professional/selfemployed/businessmen duly accepted by the ITO wherever applicable to be submitted. IT return not mandatory for Agriculturist. 7. Audited Balance sheet/P&L statement for 2 years/ Shop & Establishment Act Certificate/ Sales Tax certificate / SSI registered Certificate / Copy of Partnership (Other than salaried and Agriculturist) 8. In addition to the above: Salaried: Irrevocable letter of authority from Applicant/ Letter of undertaking from employer. Self Employed & Businessmen: Cheque drawn from their own or Firms account after obtaining the firms mandate Post-dated Cheques for repayment and 6 PDCs for covering the loan amount.

Processing Time Mode of disbursement

2 days after submission of all documents

Amount will be credited to the account of supplier/ dealer by way of RTGS/NEFT facility. If dealer is maintaining account with SBI his account will be credited through CBS system.

Penal Interest

For Loans above Rs.25000/- , if the irregularity exceeds EMI or Instalments amount, for a period of one month , then penal interest would be charged @2% p.a.(over and above the applicable interest rate) on the overdue amount for the period of default. If part instalment or part EMI remains overdue, then penal interest should not be levied.

Prepayment Penalty Takeover of Loans

No Prepayment Penalty will be charged.

Take over loans from other banks for vehicles up to 2 years old. If there is no change in ownership, the rate of interest for new vehicles will be applicable.

Reimbursement Reimburse finance for the Cars purchased out of own funds of cost of Car purchased by own sources Insurance which are not more than 3 months old. The rate of interest applicable to new Cars will be available for loan by way of reimbursement. Free Personal Accident Cover equivalent to amount of loan outstanding (subject to Maximum amount of Rs 40 lakh. Optional Life Insurance at attractive rates of premium: The one time premium can also be added to the loan amount.

Payment of

Fee of 1.5% of Loan amount will be paid on the Business

service Charges Sourced by the dealers, inclusive of service tax. The service to Car Dealers fee is payable only when loan applications are sourced by the car dealers to the Bank. Payment of A fee of 0.25% of the loan amount (maximum Rs. 3000/-)

service Charges will be paid as incentive to DSEs for the loan applications to Dealers Sales sourced by them. Executive

SBI COMBO LOAN SCHEME Between the Age: 21 65 years (for sanction of loan),loan can be granted for persons beyond 65 years who have sufficient, regular and continuous source of income for servicing the loan. Loan must be fully repaid before the borrower attains the age of 70 years. Who are Eligible Individuals Salaried, Professionals, Self Employed,

Eligibility

Businessmen, Person engaged in Agricultural and allied activities. Proprietary & Partnership Firms who are income tax assesses with Minimum net annual income of Rs. 2,50,000/-

Purpose Loan Amount

For purchase of Car and Two Wheeler taken together. Finance for on-road price as against ex-showroom price Maximum: 48 times of Net Monthly Income or 4 times the Net Annual Income. For new vehicles: No ceiling on absolute loan amount

Margin Security Processing Fee

15% Hypothecation charge in the books of R.T.O. Rs. 500/- per application till 30.06.2013

Repayment Period Process

Maximum repayment period of 84 months.

i) Submission of both the invoices alongwith application form. ii) Disbursement: a) Simultaneously for two vehicles or, b) First Car Loan portion and then two-wheeler portion. But any case both disbursement should be within one month

Documents required

1. Statement of Bank account of the borrower for last 6 months. 2. 2 passport size photographs of borrower(s). 3. A copy of passport /voters ID card/PAN card. 4. Proof of residence- Tax receipts, Telephone bill, Ele bill etc.. 5. Latest salary-slip showing all deductions 6. I.T. Returns/Form 16: for last 2 years for salaried employees and 2 years for professional/self-

employed/businessmen duly accepted by the ITO wherever applicable to be submitted. IT return not mandatory for Agriculturist. 7. Audited Balance sheet/P&L statement for 2 years/ Shop & Establishment Act Certificate/ Sales Tax certificate / SSI registered Certificate / Copy of Partnership (Other than salaried and Agriculturist) 8. In addition to the above: Salaried: Irrevocable letter of authority from Applicant/ Letter of undertaking from employer. Self Employed & Businessmen: Cheque drawn from their own or Firms account after obtaining the firms mandate Post-dated Cheques for repayment and 6 PDCs for covering the loan amount. Processing Time Mode of disbursement Amount will be credited to the account of suppliers/ dealers by way of RTGS/NEFT facility. If dealers are maintaining account with SBI his account will be credited through CBS system. Penal Interest For Loans above Rs.25000/- , if the irregularity exceeds EMI or Installment amount, for a period of one month , then penal interest would be charged @2% p.a.(over and above the applicable interest rate) on the overdue amount for the period of default. If part installment or part EMI remains overdue, then penal interest should not be levied. 2 days after submission of all documents

Prepayment Penalty Insurance

No Prepayment Penalty will be charged.

Optional Life Insurance at attractive rates of premium: The one time premium can also be added to the loan amount.

Payment of

Fee of 1.5% of Loan amount, inclusive of service tax. The

service Charges service fee is payable only when loan applications are sourced to Car Dealers by the car dealers to the Bank. ( The incentive is applicable for Car dealers only, not for Twowheeler dealers under the scheme) Payment of A fee of 0.25% of the loan amount (maximum Rs. 3000/-) will

service Charges be paid as incentive to DSEs for the loan applications sourced to Dealers Sales by them. Executive ( The incentive is applicable for Sales Executives of Car dealers only, not for Sales Executives Two-wheeler dealers under the scheme) Payment of A fee of 0.20% of the loan amount will be paid as incentive to

service Charges ALCs for the loan applications sourced by them to ALC Take over of Loan Reimbursement Not permitted of cost of vehicle already purchased Not permitted

SBI HOME LOAN SCHEME

1. Purpose 1.1 Loans under the Banks Home Loan Scheme may be granted to individuals to enable them to Purchase a plot of land for purpose of construction of house Purchase /construct a new house/flat Purchase an existing (old) house / flat or extend an existing house \repair or renovate an existing house /flat Furnishing / consumer durables as part of the project cost. Re-imbursement of investment made from own resources during the precedingtwelve months for purchase /construction /repairs /extension of house. 1.2 Loans for more than one house may be granted to an individual provided: a) Applicant(s) should fulfil the income criteria as also EMI/NMI norm after Netting off the repayment obligations of the existing loans and subject to Satisfactory conduct of existing loan(s) for a minimum period of one year.

1.3 Takeover of Home Loans availed by an individual borrower from otherBanks/financial institutions may be considered under certain circumstances After strictly following the procedure laid down.

ELIGIBILITY 2.1 Individual(s) over 18 years of age with steady source of income*, including Persons engaged in agriculture & allied activities. 2.2. Maximum Age Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age By which the loan should be fully repaid, subject to availability of sufficient, 9 regular and continuous source of income for servicing the loan repayment.

Sanctioning authority is, however, left with discretion to sanction loans to Individuals above the age of 70 years, provided son / daughter / spouse, who Is a legal heir and below the age of 50 years, with sufficient income for Servicing the loan repayment, joins as co-borrower / guarantor. Loan Repayment in such cases should be made through a joint deposit account / Current account in the names of all the joint borrowers / guarantors. 2.3. No. of Co-Borrower: Restricted to maximum 3 including spouse/children/parents/siblings. However, AGM [Region] / AGM (Branch) can relax maximum no of borrowers Provided the property is registered in the joint names of all the Borrowers and loan repayment is made through an account with us in the joint Names of all the borrowers. 3. Maximum Loan Amount: 3.1. For purchase / construction of a new house / flat: Project cost which may include cost of land, additional amenities, registration Charges, stamp duty, etc. less stipulated margin revised from time to time. 3.2. For furnishings / consumer durables: 10% of the project cost or Rs. 3 lacs whichever is less where check off facility or additional security or 3rd party guarantee good for the amount is available. 3.3. For repairs / renovations: The maximum loan amount should not normally exceed Rs 10 lacs. Such loans Exceeding the above ceiling amount require prior administrative clearance From the GM of the network, in all cases where sanctioning authority is an Official of a lower grade. 3.4. Reimbursement of investment in housing, made during the preceding 12 Months: Home loan may be sanctioned for reimbursement of investment made by the

Borrower in housing from own resources during the preceding 12 months Subject to the following conditions: i) Reimbursement will be restricted to investments made by the borrowerfrom own resources in construction/repair/renovation of house / purchase of Property including registration fee and stamp duty paid for the purpose. ii) Small expenditure like furnishing, wood work will not be considered for Reimbursement. iii) Quantum of reimbursement will be based on (a) the present market Value of the property as per the valuers certificate or (b) the investment made By the borrower, whichever is lower. Expenditure receipts should be obtained And kept on record. iv) A higher margin of 25% will be insisted upon 3.5 Explanations: Actual loan amount will be determined taking into consideration such factors as applicants income and repaying capacity, age, assets and liabilities, cost of 10 the proposed house/flat etc. As regards loans for repairs/ renovations/ Constructionetc, RACPCs / Branches should satisfy themselves about the Estimated cost of work involved having regard to the extent thereof, materials to be used, cost of labour and other charges and after obtaining certificate(s) of Qualified engineers/ architects, as considered necessary. 4. Eligible Income for arriving at maximum loan amount 4.1. In addition to the applicants income, Income of spouse/children /parents / Siblings may be considered for arriving at maximum loan amount subject to Following conditions 4.1.1 If the proposed property is held jointly with the spouse /children/parents/siblings then all the joint holders of the property should

Join as co-borrower, but in cases where the property is held in single name of The borrower the spouse / children/parents/siblings may join as co-borrower Or as guarantors. 4.1.2. Co-borrowers/Guarantors (wherever guarantors income is considered for Arriving at loan eligibility) should be employed/ engaged in business/ Profession etc. for a minimum period of one year and has a steady source of Income evidenced by salary certificate, Form 16 or Income Tax Return Repayment by debit to his/her salary account maintained with us or by means of post-dated cheques issued from a joint account maintained by the borrower With the co-borrowers/guarantors.

5. Net Monthly Income (NMI) / Net Annual Income (NAI)-Explanations: 5.1. Salaried persons: NMI means monthly income net of all statutory deductions. 5.2. Other than Salaried persons: NAI means annual income as per latest income tax Return filed. 5.3. Agriculturists: NAI should be arrived at, based on the nature of their activity (e.g. farming, dairy, poultry, orchards), land holding, cropping pattern, yield etc. and average level of income derived there from in the area. 6. EMI/NMI Ratio a) Based on in come-wise graded ratio as under: Net Annual Income EMI/NMI ratio Upto Rs.60,000/- 20% Above Rs.60,000/- and upto Rs.1,20,000/- 25% Above Rs.1,20,000/- and upto Rs.2 lacs. 30% Above Rs.2 and uptoRs. 5 lacs. 50% Above Rs.5 lacs and upto Rs.10 lacs. 55%

Above Rs.10 lacs. 65% Increase upto 5% in the above ratios may be permitted by the controller of the Branch/ RACPC, which processes the loan application, depending on the family size and availability of disposable surplus income. Equated Monthly Instalment (EMI) for the purpose of computing the EMI/NMI ratio willinclude all EMIs towards existing loans and the proposed loan, therefore Existing EMIs should not be deducted from Gross Monthly Income for the Purpose of computation of NMI. 13 b) Limit enhancement due to SBI Life premium: In cases where the customer opts to avail SBI Life Dhanaraksha policy, the stipulations are as under: Margin on Premium: 0%. Loan limit is increased by the premium amount. Interest Rate: The loan will carry the same rate of interest after adding the Premium amount to the loan amount. EMI/NMI Ratio: Increase in EMI/NMI Ratio to the extent caused by Addition of premium amount to the Loan Limit will be automatically Permitted. (General Manager (Net Work) vested with a discretion to permit EMI/NMI Ratioup to 70% in case of Home Loan customers whos Net Annual Income (NAI) is Rs.10 lacs and above.)

FINANCIAL PERFORMANCE Profit the operating profit of the bank for 2011-12 stood at rs 31,573.54 crores as compared to rs 25,335.57 crores in 2010-11 registering a growth of 24.62%. the bank has posted a net profit of rs11,707.29 crores 2011-12 as compared to rs8,264.52 crores in 2010-11 registering a growth of 41.66%.

While net interest income recorded a growth of 33.10%, the other declined by 9.31%,operating expenses increased by 13.27% attributable to higher staff cost and other expenses.

HIGHLIGHTS & INITIATIVES Relationship banking- under single window approach, the bank is offering relationship banking to SME entrepreneurs. Specialised SME branches- to provide specialised services to SME entrepreneurs, 400 branches having predominant share of SME advances in their portfolio were identified for rebranding as SME BRANCH. Supply chain financeUnder e-DFS and e- VFS, the bank has tied up with 60 industry majors with aggregate business of over 3,325 crores across all industry verticals like auto, oil etc SUPPORT AND CONTROL OPERATIONS INFORMATION TECHNOLOGY1. Core banking- a major infrastructure upgrade of hardware and data storage system has been undertaken for the primary and the disaster recovery set up to ensure uninterrupted & efficient operations.

ATM Mobile banking Internet banking

2. Foreign offices- 137 branches in 24 countries, including 2 OBUs, in India, run their operations on a common banking applications

software, with their databases connected to a central data centre backed up by a synchronized disaster recovery site. 3. Enterprise data warehouse

4. Payment system group

5. networking

CORPORATE SOCIAL RESPONSIBILITYFocus area for our CSR activities areSupporting education Supporting healthcare Supporting girl children & child development Environment protection Clean energy Help in national calamities. LIFE INSURANCEPremium is recognised as income when due from policy holders. Uncollected premium from lapsed policies is not recognised as income until such policies are revived. Premium ceded on reinsurance is accounted in accordance with the terms of the treaty or in principal arrangement with the reinsurer. Claims by death are accounted when intimated, intimations up to the end of the year are considered for accounting of such claims. Acquistion costs such as commission medial fees etc. are cost that are primarily related to the acquistion of new and renewal insurance contracts.

Liability for life policies- the actuarial liability of all athe life insurance policies has been calculated by the appointed actuary ar per the guidelines.

MUTUAL FUNDS- mutual fund is a trust that pools money from a group of investors and invest the money thus collected into asset classes that match the started investment objectives of the scheme. The securities and exchange board of India regulations.1993 defines a mutual fund asA fund established in the form of a trust by a sponsor, to raise monies by the trustee through the sale of units to the public, under one or more schemes, for investing in securities in accordance with these regulations. A mutual fund is a body corporate registered with the securities and exchange board of India (SEBI) that pools up the money from individual /corporate investors and invests the same on behalf of the investors, in equity shares. A mutual fund is required to be registered with securities exchange board of India ( SEBI) which regulates securities market before it can collect funds from the public. OBJECTIVES OF MUTUAL FUNDSTo provide an opportunity for lower income groups To acquire without much difficulty, property in the form of shares To manage investors portfolio Provides regular income Growth Safety Tax advantage

FISCAL DEFICIT Fiscal deficit = [Total Expenditure-(Revenue receipts + Recoveries of Loans + Other Receipts)] Fiscal deficit is 5.9% of the GDP during 2011-12 (RE). High level fiscal deficit affects the exchange rates, interest rate and Inflation. Definition: Fiscal deficit is a public finance term Used to describe a situation when the Governments total expenditure surpasses the revenue generated. It is the difference between the governments total receipts (excluding borrowing) and total expenditure. Fiscal deficit gives the signal to the government about the total borrowing requirements from all sources. Fiscal deficit = [Total Expenditure-(Revenue Receipts + Recoveries of Loans + Other receipts)] According to IMF Fiscal Monitor report,the world overall fiscal deficit went up from 2.0%of GDP in 2008 to 6.7% in 2009 following thelarge fiscal stimulus to alleviate the adverseimpact of the global financial and economiccrisis. After declining to 5.5% of GDP in 2010,the fiscal deficit is projected to fall to 4.5% in2011 and 4.1% in 2012.Advanced economies as a group hadlarger deficits in both the pre-crisis and post crisisperiods according to the Fiscal Monitorreport. While the fiscal deficit of advancedeconomies was 7.6% of GDP in 2010 andprojected to be 6.6% in 2011; that of emergingmarket economies is placed at 3.6% and 2.6%respectively for these years. Among the majoremerging economies,

Indias fiscal deficit at8.9% in 2010 and estimated level of 8.5% in 2011was among the highest.Trends in Fiscal Deficit of Central Government(As% of GDP) Year Fiscal deficit 2006-07 3.3 2007-08 2.5 2008-09 6.0 2009-10(actual) 6.5 2010-11(actual) 4.9 2011-12 (RE) 5.9 2012-13 (BE) 5.1 Source: Economic Survey, 2011-12, and Budget at a Glance, 2012-13. In actual terms, the Budget for 2012-13 had estimated the level of fiscal deficit at Rs.5, 13,590 crore and revenue deficit at Rs.3, 50,424 crore. Indias fiscal deficit during April to February (2011-12) was Rs.4.94 trillion ($96.8 billion), or 94.6% of the revised full fiscal year 2011/12 target. During the same period in the last fiscal year, the deficit was 68.6% of the budgeted target. Impact of High Fiscal Deficit

Fiscal deficits play a role especially during currency crisis. If a country follows a fixed exchange rate mechanism and also runs a large fiscal deficit, it could lead to speculative attacks on the currency. NEW BANK LICENSING POLICY New Banking license is overdue as last license were issued almost a decade back in 2001.It was also announced in budget speech for 2010-11. RBI has issued draft guidelines for new licenses.Promoters / promoter groups (of residents only) that have a successful track record for at least 10 years in running their businesses shall be eligible.New banks will be permitted only through a wholly-owned NonOperative Holding Company (NOHC). The aggregate non-resident shareholding from FDI, NRIs and FIIs in the new privatesector banks shall not exceed 49% for the first 5 years from the date of licensing of thebank. Guidelines(A) Eligible promoters (i) Only entities / groups in the private sector that are owned and controlled by residents shall be eligible to promote banks. (ii) Promoters / promoter groups with diversified ownership, sound credentials and integrity that have a successful track record for at least 10 years in running their businesses shall be eligible to promote banks. (iii) Entities/groups that have significant (10% or more) income or assets or both from activities, such as real estate construction and broking activities taken together in the last three years, shall not be eligible to promote banks. (iv) Applicants will be required to list group companies undertaking key business activities. (B) Corporate structure

(i) Promoter / promoter groups will be permitted to set up a new bank only through a wholly-owned Non-Operative Holding Company (NOHC). funds for investing in companies held by it. (C) Minimum capital requirements and Holding by NOHC (i) The initial minimum paid-up capital for a new bank shall be 500 crore. The actual capital to be brought in will depend on the business plan of the promoters. (ii) The NOHC shall hold a minimum of 40% of the paid-up capital of the bank which shall be locked in for a period of five years from the date of licensing of the bank. (iii) Shareholding by NOHC in the bank in excess of 40% of the total paid-up capital shall be brought down to 40% within two years from the date of licensing of the bank. (iv) In the event of the bank raising further capital during the first five years from the date of licensing, the NOHC should continue to hold 40% of the enhanced capital of the bank for a period of five years from the date of licensing of the bank. (v) The shareholding by NOHC shall be brought down to 20% of the paid up capital of the bank within a period of 10 years and to 15% within 12 years from the date of licensing of the bank and retained at that level thereafter. (D) Foreign shareholding in the bank The aggregate non-resident shareholding from FDI, NRIs and FIIs in the new private sector banks shall not exceed 49% for the first 5 years from the date of licensing of the bank. No non-resident shareholder, directly or indirectly, individually or in groups, will be permitted to hold 5% or more of the paid up capital of the bank. After the expiry of 5 years from the date of licensing of the bank, the foreign shareholding would be as per the extant policy. Currently, foreign shareholding in private sector banks is allowed up to a ceiling of 74% of the paid up capital.

SUBSIDIES AND BANKS Banks in India have been involved in subsidyimplementation in a big way sinceindependence. The various modes throughwhich the government provides subsidy throughbanks are: 1. Back Ended Subsidies: Subsidy amount is provided to the banks but these are provided to the borrower only after satisfactory utilization of funds and as the last instalments. Loan amount is the projectcost minus margin. Examples includePMREGP, NABARD subsidy scheme andSGSY . 2. Front Ended Subsidies: Subsidy amount is provided upfront to the borrower. Loan amount is project cost minus margin minussubsidy amount. An example is the Social Component Plan (SCP). 3. Interest Subsidies: Subsidy is provided in the form of relaxation in interest rates. The Kisan Credit Card scheme is an example. Effective utilization of subsidies can be a major boost for banks in implementing financial inclusion as well as creating future markets for its products, particularly loans. The cost that needs to be paid is the efforts to be put in counselling as well as follow up, but the results may well be worth the efforts.

BANKING & FINANCE Account Planning is an effective tool to assemble basic facts on the client account and evaluate client situation and evaluate and quantify his needs. It helps to assess

competitors, develop a relationship plan, activity plan and execute, monitor and track the progress frequently. For the Relationship Team, preparation of an account plan helps to price services in line with account profitability. It is a means to cross sell and up-sell profitable products. It enables the operating team to work with customer/internal functions to identify rationalization opportunities. ACCOUNT PLANNING To develop a perspective on current and future customer profitability. To set customer-wise targets across product categories and review action plans to course correct. Establish the business potential of the portfolio through a bottom-up planning process. Help the bank design initiatives to target greater wallet share especially for fee incomeproducts. Help institutionalize a process which would enable relationship managers understandand codify customer needs in a more effectiveand better manner and evolve asystematic approach to target customers.Account Planning can be used to understandand monitor actual balance sheet usage byaccount. Documentation of the planning andstrategy allows the team to institutionalizeaccount knowledge (sharing with other productunits). For the management, account plan summaries can be used to gain approval of account strategy and inform management of resource requirements and customer strategy. Account plan summaries are often shared with customers to gain their agreement to the proposed plans and raise awareness about account performance from banks perspective. STRUCTURE OF AN ACCOUNT PLAN: Company background / Background information, address, products overview

Company financials financial summary, key opportunities identified from financials Company / industry Press search summary (announcement of projects, expansions etc), Overview highlights from analyst reports / industry surveys Relationship details Key decision makers with roles and contacts with the bank Product profitability Historic performance of customer with bank and value creation by and analysis product comparison of bank with other banks, barriers to increase share, overall potential by product Tips: All key stakeholders should be covered Hold meetings with key client personnel (finance, treasury and trade) Include people within purchases, sales, commercial and foreign trade Counterparts from bank to interact simultaneously to ensure role and quality of relationship Key roles that influence transactions/ business to be taken into account Collect all data on advances, deposits, trade finance, bills, collections, remittances, tax data, treasury, investments (bonds, debentures, CPs) Estimate volumes or income whichever is easier and use it to extrapolate the other. CREDIT GUARANTEE FUND SCHEME FOR MICRO AND SMALL ENTERPRISES AND COLLATERAL FREE LOANS Aimed to facilitate the flow of collateral free credit up to Rs.100 lakh for Micro and Small Enterprises (MSEs). Credit facility is any financial assistance by way of term loan and/or fundbased and nonfund- based working capital (e.g., Bank Guarantee, Letter of

credit, etc.) facilities extended by the lending institution to the eligible borrower (except retail trade). Of the credit facilities extended by Member Lending Institutions (MLIs), guarantee cover is,in the case of default by the borrower, up to 75% (85% for select category of borrowers). Loans up to Rs. 100.00 lacs to MSE sector has to be free of collateral if it qualifies for coverageunder CGTMSE guarantee cover. The criticality and importance of MSEs in driving Indias growth story needs no elaboration. Thereis enough evidence to suggest that a strong andvibrant MSE sector in the country is one of thekey elements responsible for attaining higherGDP growth rates. Creation of higher levels ofemployment per capital invested, addressing thevital issue of employment of a large number ofthe under-privileged and disadvantaged sectionsof society, overcoming the obstacles to rural andsemiurban prosperity, optimizing utilization oflocally available resources, providing an enablingenvironment for the millions of young Indians toparticipate in the nation building task are areas offoremost concern in the Government of Indiasagenda for development. In the absence of collateral or third party guarantee, adequate and timely finance at reasonable rates of interest to entrepreneurs having viable business proposals in MSE sector has been a major bottleneck. Recognising this weakness, the Government of India (GoI) and Small Industries Development Bank of India (SIDBI) set up the CGTMSE in August 2000 to provide guarantee support to banks and lending institutions for their exposure to the MSE sector. This is the only credit guarantee institution in the country exclusively set up for the benefit of entrepreneurs in the MSE sector.

The CGS is beneficial both to the MLI as well as the MSE units. The operations of CGTMSE during the past few years have recorded sharp growth both in terms of number of enterprises and guarantee amount approved. This is indicative of the growing popularity of the Scheme and the confidence amongst MLIs about the beneficial aspects of Credit Guarantee Scheme. It is also an endorsement of the ability of CGTMSE in delivering on its commitments. Since inception, the Trust has been constantly endeavouring to improve its services by pushing the envelope, enriching the in-house team, setting higher performance benchmarks and encouraging practices in all areas of operation. The Credit Guarantee Scheme of CGTMSE is an important programme of the GoI aimed to facilitate the flow of collateral free credit up toRs.100 lakh for Micro and Small Enterprises (MSEs) as per the definition under MSMED Act. As per RBI guidelines, no collateral security is to be taken from borrowers, both under manufacturing as well as services sector, with credit limits up to Rs.10 lakh and therefore, all these units (except retail trade) will be eligible for coverage under CGTMSE scheme. GOLD ETFs Efficient diversification for investment portfolio. Easy Liquidity through stock exchange. Ease of Operations through demat account. Cost effective - No making charges and premia, as incurred in Jewellery. Secure - Each unit is backed by physical Gold held in secured vaults. Assured Purity - All gold bullion held is 99.5% pure. Smaller unit size - one unit is approximately equal to one gram of Gold. As Indians, we love gold. Every Indian home has a little of it. Whatever be the occasion, for centuries, gold has remained an auspicious gift, while welcoming a

new born, their birthdays, for celebrating success, weddings, wedding anniversaries, reaching various milestones in life or even at death (Suvarna Dan as a part of last rites), gold has been a integral part of Indian life. We all know how gold gets passed down generations and has proved to be a good investment over decades. No wonder, India is worlds largest consumer of gold. Golds most enduring benefit is its ability to stabilize a portfolio and protect it against market fluctuations. Historically, gold prices have shown better stability even during periods of crisis, as compared to other investment types. Most experts advise investing in gold as a must, since gold creates a robust portfolio that withstands market fluctuations. Gold has a high liquidity quotient and accepted all over the world as a means of exchange. GREEN BANKING Green / Ethical Banking imply socially and environmentally conscious banking. It includes: ethical investment, socially responsible investment, corporate social responsibility. Green Banks have the potential to create environmentally and socially consciousbusiness practices. They can introduce pricing differentials for units that are following environmentallysustainable business practices and charge more for units that arent doing so. Banks have been surprisingly slow to examine the environmental performance of theirclients. They must consider performing a triple bottom line analysis (an analysis that takesinto account environmental, social, and financial performance) of their borrower customers.

Green Banking is when a normal bank takes intoconsideration all the social andenvironmental factors while carrying on its basicoperation of lending and raising deposits. It is alsocalled an ethical bank. Green/ Ethical banks havestarted with the aim of protecting theenvironment. These banks are controlled andmanaged by the same authorities as traditionalbanks. A Green/ethical bank is also known as a social, alternative, civic, or sustainable bank. Such a bank is concerned with the social and environmental impacts of its investments and loans. Green banks are part of a larger societal movement toward more social and environmental responsibility in the financial sector. This movement includes: ethical investment, socially responsible investment, corporate social responsibility and is also related to such movements as the fair trade movement, ethical consumerism, boycotting, etc. Green banking is a juvenile sector within this movement. Other areas, such as fair trade, have comprehensive codes and regulations to which all industries that wish to be certified as fair trade must adhere. Green banking has not developed to this point; because of this it is difficult to create a concrete definition distinguishing exactly what it is that sets a green/ ethical bank apart from conventional banks. MOBILE BANKING IN INDIA: OPPORTUNITIES AND CHALLENGES Mobile Banking Services offered by Banks in India enable the customers to perform: a) Enquiry Services (Balance Enquiry/Mini Statement)

b) Fund Transfer (Between Self Accounts and Third Party Transfers) c) Cheque Book Request d) Bill Payments e) M-Commerce Payments f) Mobile Top-ups g) Mobile Money Transfer Mobile application patterns also vary acrossbanks. Indian Banks are deploying a mix of handheld terminals viz., SMS Banking, Unstructured Supplementary Service Data (USSD) and Application/WAP based services. While first two meet the requirements of lowend mobile models, the last two will meet the choice of the customers who are having GPRS/ Java enabled Smartphones. Mobile Banking Statistics According to the data from RBI 3,123,105 mobile banking transactions have taken place amounting to Rs. 232.50 crores for the month of March 2012. Out of these, approximately 2,560,751(82%) transactions were from customers of State Bank of India. A study by BCG pointed out that mobiletransactions in India were expected to touch$350 billion by 2015. New Opportunities for Banks towards Mobile Banking Penetration National Payment Corporation of India has introduced a new channel for transfer of funds using Mobile Banking Service. Inter Bank Mobile Payment System (IMPS). Many banks are extending this facility to their customers. This channel enables customers to transfer and receive money from the customers of 37 banks, Risk Factors in Mobile Banking The four risk factors in Mobile Banking are: 1. Anonymity (risk of not knowing a customers actual identity) 2. Elusiveness (ability to disguise mobile transactions, origins and destinations)

3. Rapidity (speed with which illicit transactions can occur) 4. Poor oversight (refers to the level of regulation of service providers). FARM FINANCE A BOOST TO RURAL PROSPERITY: AGRI LOAN PRODUCTS 1. Kisan credit card (KCC)The kisan credit card is to provide timely and adequate credit to farmers in order to meet their production credit needs contingency expenses and expenses related to ancillary activities, helping the borrowers to avail loans as and when they need. 2. Agriculture gold loansAn agricultural gold loan is granted to farmers for meeting their agricultural expenses.it is one of the most secure loans as per our banks experience and NPA is almost nil/negligible. 3. Produce marketing loanTo help farmers avoid distress sale of their produce. To enable prompt repayment of crop loan dues and provide liquidity to farmers to meet contingencies To offer the facility of loan against the stocks stored in farm houses, in addition to loan warehouse receipts. 4. Scoring model for tractor loansTo provide finance for purchase of new tractors, accessories and implements so as to enable the farmers to improve crop productivity by utilising them on their own farm ant to use for custom hiring. Farmers with minimum 4 acres of perennially irrigated land or corresponding acreage of other lands are eligible for this loan. 5. Scheme for financing dairy units-

Construction of dairy shed Purchase of quality milch animals, milking machine, chaff cutter or any other equipment required for the purpose. Eligible borrowersIndividual farmers who are members of AMUL pattern milk societies, producing and selling milk to the society, or where assured Tie-up is available. Individual dairy unit having less than 10 animals should own minimum 0.25 acre of land for every 5 animals for growing fodder and be in a position to procure the balance requirements locally. THE GOLDEN AGE OF SWARNA DHARAAGRI GOLD LOAN IN SBIIn our bank, gold loans are given as a secured demand loan to farmers to meet the needs of crop production credit and investment expenses related to agriculture or for allied activities like dairy, poultry, fisheries. Gold segment is one of the lowest risk loan products in agri loan segment. In order to retain as also gain and regain customers and to boost agri gold loan business to improve our market share, the swarna dhara campaign was launched by our bank from 1.10.10 to 31.12.11 in all circles by offering a 7% interest rate to the agriculturist for short term production credit.

OPERATIONAL RISKS IN BANKS

Operational risk in banks can arise before, during and after a transaction is processed. Shift by some banks away from traditional banking towards a more tradingoriented environment and the increasing concentration of processing risk may mean that banks may be more vulnerable to sudden, extreme losses than before. Or may not pay at all. The loan may become bad due to lack of proper assessment of the credit proposal also. In these two cases, the risk can be called credit risk. However, if the credit officer has exceeded his authority in sanctioning the loan or the credit officer is bribed to sanction the loan and subsequently the loan becomes bad, then the risk involved is called operational risk. A computer breakdown involving huge loss to the bank can be ascribed to operational risk. Any financial loss that may occur to the bank due to the fraudulent activity of its staff member or an outsider is to be categorized under the head operational risk. Types of Operational Risks Operational risks can be broadly divided intooperational strategic risk and operational failure risk. Operational Strategic risk includes political, taxation, regulation, government and competition. It pertains to the prevailing environmental conditions. The latter arises out of the failure related to people, process and technology. Operational risk can arise before, during and after a transaction is processed. Risk exists before a potential transaction is designed. A firm is exposed to several risks during the processing of the transaction. First, the sales person may not fully disclose the various pros and cons of the transaction to the potential client. He may persuade a client to enter into an agreement which is totally inappropriate for him (client). This is called people risk. Second the sales person may depend on

sophisticated models to price the transaction, which creates what is commonly called model risk. Broad Classification of Operational Risk in Banks (a) Control Risk: Any unexpected loss which arises due to lack of an appropriate control is bifurcated into inherent risk and control risk. Inherent risk is associated with the specific type of business. For example, derivative trading process is understood by only a few key people. (b) Process Risk: This is the risk that occurs due to the business process being inefficient causing unexpected losses. (c) Reputation Risk: This is the risk of an unexpected loss in share price or revenue due to the impact on the reputation of the firm. (d) Human Resources Risk: The organization has a major role in selection of the right type of people, developing them and retaining them. The hiring procedure and the termination procedure should be foolproof to ensure that the firm does not face any unexpected loss. (e) Legal Risk: The risk of suffering legal claims due to product liability or employee action. The risk that a legal opinion on a matter turns out to be incorrect in a court of law. (f) Takeover Risk: It is highly strategic but can be controlled by making it uneconomical for a predator to take over the firm. This could be done by attaching the golden parachute clause to the directors contract. It means that the severance payment to the director should be at a high price, which makes the acquirer to think twice before taking the plunge. (g) Marketing Risk: The product may fail due to wrong marketing strategy. The benefit claimed about the product is misrepresented in the marketing material.

(h) Technology Risk: The risk that may arise due to various new developments that may take placein the technology front by making the oldertechnology redundant. (i) Tax Changes: If tax changes are made, particularly with retrospective effect, they may make the business unprofitable. (j) Regulatory Changes: A change in percentage of charge in terms of risk weighted assets can have impact on the business. (k) Business Capacity: If the existing IT infrastructure cannot support a growing business, the risks of major system failure arehigh. (l) Project Risk: Project failure including delay in execution is one of biggest causes of risk in most firms. (m) Security: The firms assets need to be secured from both external and internal theft. (n) Supplier Management Risk: If the business is exposed to the performance of third parties, then the firm is exposed to this type of risk. (o) Natural Catastrophe Risk: Past history is analysed to assess such type of risk. Operational risk manager should see whether the firm is likely to be affected by flood, earthquake or any other natural disaster. (p) Man-made Catastrophe Risks: If the firm is situated near defence installation, prison, airport or nuclear plant, then this type of risk is expected. It also includes possible terrorist threat to such types of establishments.

Conclusion India faces a problem of huge capital inflow and needs appropriate regulations as well as risk management systems to avoid any potential shocks. Globalization, increasing reliance on technology, use of exotic financial products and a more stringent regulatory environment mean that the opportunities for and

consequences of - operational risk have proliferated. The future will be determined by the extent to which banks allocate capital to market, credit and business strategic risks. Now there is increasing focus on operational risk aspect as this may cause liquidation of some banks if timely action is not taken.

AMBALA SCIENTIFIC INDUSTRY

Nearly over 100 years back the scientific instrument industry started at Ambala and at the time of starting it was in Punjab State covering a large area of Punjab and Haryana at present.

By now over 1000 cottage, small and medium scale industries are working and 1000 workers are engaged with the industry earning their livelihood. The name of Ambala is known as "A MOTHER PLACE OF SCIENTIFIC INSTRUMENTS" all over the world.

The following are some of the stalwarts of the industry who have contributed in its development and it is their efforts that the industry is at its present stage,

1. 2. 3. 4. 5. 6.

Sh. Hargo La1 Sh. Nand Lal Sh. Desh Raj Tuteja Sh. Gian Chand Jain Pandit Jagan Nath Sharma Sh. Rampal Sharma

7. 8. 9. 10. 11. 12.

Sh. Prithvi Raj Sh. Madan Lal Sh. Sardari Lal Sh. Sada Ram Sh. Banrsi Dass Dhiman Sh. Lachhi Ram

In the beginning, a few persons who were basically the science teachers or connected with science subject started their companies. They too were initially importing science instruments, stocking and supplying to the educational institutions in India. This situation continued for 15 to 20 years and then the teachers of educational institutions conceived the idea of manufacturing instead of importing the instruments. This idea struck the mind of Ambala suppliers and they started making efforts to manufacture basic science instruments, which were of 1ow cost and for which no high technology was involved. The result was astonishing when it was found that the items taken up for manufacturing; for which, the importing cost was Rs. 50/- when manufacturing started at Ambala the cost came down to Re. 1/-.

Manufactured instrument were useful and can serve their purpose for practicals in their laboratories.

Practically speaking, those who had taken up the manufacturing of instruments did not have any hi-tech machinery to manufacture. But with a crude method the local technicians could produce and after producing they monitored the working of their instruments by comparing with the instruments being imported from foreign countries. It was a matter of satisfaction and encouragement for the technicians engaged that their efforts were bearing fruit with nation wide acceptance of locally manufactured instruments; which inspired them to take up manufacturing of more items.

The process, moving ahead though slowly yet steadily reached stage with the following areas of manufacturing activities:1. 2. 3. Glassware Spring balances Calipers

4. 5. 6. 7. 8. 9. 10. 11. 12.

Meter rules Specific gravity and expansion instruments Vacuum pumps Hydrostatics Thermometers Weights Pulleys Crucible tongs Retort stands

In the year 1946, a manufacturing unit produced a spectrometer, which were being used in science laboratories of the higher educational institutions for carrying out light experiments. The spectrometer was supplied to NDA Dehradun and the Academy carried out the experiments, and reported the product satisfactory and excellent to meet with the required standards. The credit for this

achievement goes to Late. Sh. Gian Chand Jain, one of the pioneers of Scientific Instrument Industry. The Microscope which are being used in biological laboratories to examine insects and seeds etc by slides, were also produced at Ambala Cantt and initially the lenses which were used in microscopes were imported from Japan, later, Central Science Instruments Organization (CSIO), Chandigarh helped the Ambala Industry and installed the basic infrastructure and required machinery at Chandigarh. They gave training to the Ambala technicians who succeeded in producing substitutes of imported lenses being used in the microscopes. At present each and every part of microscope is being manufactured at Ambala Cantt and even the high-grademicroscopes used in medical and research laboratories are being manufactured at Ambala Cantt.

At present Ambala Scientific Instrument Industry is prominent at the Export Map of India and widely engaged in supplying products to foreign countries like UK, USA, Canada, Japan, Singapore, Malaysia, Indonesia, Sri Lanka, Saudi Arabia, Oman, United Arab Emirates, Kuwait, Bangladesh, Nepal, Sudan, Nigeria, Kenya,

Ethiopia, Jordan, Yemen, Mauritius, Maldives, Malawi, Iraq etc. Over 100 units are exporting the scientific instruments to the above countries.

The few names, which would always shine as stars on the horizon of Ambala Scientific Instrument Industries include Pt. Jagan Nath Sharma, who in year 1952 produced a Battery operated scooter on which Pt. Nehru took a joy ride in circuit house Ambala and praised the progress made by the Ambala Industry. The Ambala Industry has the pride to diversify its area and provide equipment for Defence, Railway, Telecom Education and other National needs.

In the year 1970, Sh. Jagan Nath Sharma also manufactured a Planetarium for the first time in India and later, it had been supplied to a number of educational institutions of India. This was also another feather in the cap of Ambala Scientific Instrument Industry.

The Ambala Scientific Instrument Industry had also developed a large range of resistance instruments like Rheostats, Resistance Boxes, Decade Resistance

Boxes, Resistance Coils, Wheatstone Bridges etc. for the first time in India and that was manufactured by Sh. Rampal, Sharma in the year 1965, who did not have any engineering diploma or technical degree. These items were having accuracy of international standards and were supplied to the educational institutions all over India. At present these instruments are being supplied to foreign countries, comparable to the accuracy of any standard of the world.

Nearly 15 years, back China assessed the requirement of scientific instruments all over the world and studied the Ambala Industry, and took, up the manufacturing of instruments and other allied items concerning educational institutions and started manufacturing in a big way with, very hi-tech machinery.

The Ambala Scientific Instrument Industry is now facing tough competition from China for the last 15 years and facing severe financial crisis and fighting for their existence because there is inadequate practical help from the General or State Govt But the Scientific Instrument Industry with a glorious history of almost a century has not lost hope. The new generation equipped with technical know of highest standards has joined the industry nursed by the their elders, pioneers and

stalwarts of industry and the industry is well poised to enable and bring the country among the Developed countries of the world.

INDUSTRIAL GOODS

Industrial Goods are products which are destined to be sold primarily for use in producing other goods or rendering services as contrasted with goods destined to be sold primarily for consumption to the ultimate consumer goods used for personal satisfaction are, of course, consumer goods.

Industrial products are all goods and services sold to business and institutional buyers and which are used by the purchasers in their own manufacturing or other business activities : industrial goods are also called producers goods i.e. product mean of production. Industrial goods are products used for further production of other goods.

Industrial goods & consumer goods. The distinction between consumer goods and industrial goods is based on their ultimate use. If a product is to be used in making other products or for the operation of an enterprise, it is called an industrial product. If a product is meant for ultimate consumption by a consumer, it is naturally a consumer product and it is sold in a consumer market.

INDUSTRIAL CUSTOMERS

On the supply side of the Industrial market, the major participants are mining and manufacturing establishments on the demand side of the industrial market, we have major participant such as Industrial and business users, government agencies and departments, service organisations and middlemen in trade e.g. Industrial distributors and exporters. Broadly speaking, industrial customers are classifies into four groups:(i) (ii) Commercial or business enterprises. Government organisations.

(iii) (iv)

Institutions. Service organisations.

(i)

Business enterprises are manufacturing concerns commercial enterprises are distribution agencies.

(ii)

Govt. is one of the greatest buyers in the Industrial market. National, State and Local Government agencies and public organisations are Industrial customers.

(iii)

Institutional customers are non profit, organisations such as Schools, Colleges, universities, Churches, Associations, Hospitals etc. There institutions may be public or private organisations.

(iv)

Service organisations include Banks, Insurance Companies, Transport Companies, Hotels, Consulting Firms etc.

EXPORT SUBSIDIES

In the changed scenario the role of subsidised export finance will become crucial for small scale exporters. GATT accord does not prevent India from providing subsidized export finance to its firms till its per capita GNP reaches $ 1000 p.a. On the other hand, main competitors to India in the international market have to phase out their export subsidies. This gives adequate time to Indian exporters to build up sufficient capacity and enhance their competitiveness on a sustainable basis through the introduction of new technologies and developing improved market access strategies. The successful conclusion of GATT and the birth of WTO will in the years to come bring the world closer with uniform laws, uniform tariffs and open markets. To achieve maximum gains exports will have to be prioritized as a planned strategy rather that surplus marketing. The small scale enterprise will have to upgrade their manufacturing standard through increased investment in research, strategic alliances, foreign collaborations, and inter industrial copper-operation. Assistance and incentives will also have to come forth from government for investment in R & D, infrastructure, marketing network and technology up gradation. Assuming that Indias share in overall world exports rises from 0.5% to 1% by 2005, the increase in trade is envisaged at $ 2.7 billion per year. The government is a substantially large buyer and the price support mechanism for purchases of products from the small scale sector helps the Indian SSIs if this provision is challenged the SSIs would be adversely affected. In the event of a multi lateral agreement, the market provided but the government purchases would have to be opened upto foreign competition and the system will have to be made more transparent.

The umbrella of the WTO is likely to have some far reaching implications for the SMEs in India, especially with regard to their competitive ability and integration with the global markets against the opportunity of an expanding global market. Most of the problems arise due to unorganized nature, lack of data and information, use of low technology and poor infrastructure in the country. WTO will affect all types of SSI units whether producing goods for the domestic market or for the international market. Beside these limitations the SSI sector is rather weak in the following areas: 1. Protection of environment 2. Ability to make competition from imports 3. Dependence on conventional schemes like DEPB, Income tax benefit under section 80, HHC, EPCG, etc. which can be challenged as actionable subsidies 4. Quality and standard gaps between SSI products and imports 5. Knowledge based and technology gaps 6. Inability to meet the prescribed hygiene and health standards, especially sanitary and phyto-sanitary, eg. Internal he case of food processing animal and plant diseases, etc. 7. Lack of awareness and information on WTO provisions

India is maintaining QRs on imports of certain agricultural, textile and other industrial products under article XVIII- B of GATT. As per the government of Indias agreement with WTO, these restrictions were to be removed in a phased manner over 7 years .in response to an appeal of USA , WTO has asked has asked India to remove these restrictions by march2001. With the removal of QRs the

policy of reservations of products for exclusive manufacture in the SSI sector would eventually become redundant. It is seen that out of 811 items reserved for SSI the current EXIM policy (March 2000); An additional 58 tariff lines comprising 67 items of SSI reserved list have been put under OGL in the latest EXIM policy. Thus bulk of the SSI reserved items are now under OGL. Due to removal of QRs many of the SSI units, especially in the consumer goods sector, will find it difficult to survive unless costs and quality improves as more imported products will find easy access to the Indian markets. Their will be stiff competition from low cost producers in the neighboring LDCs such as Nepal Bangladesh Sri Lanka and China

The Indian SSIs will have to be cautious against possible dumping by their competitors from abroad. The cost of anti-dumping investigations may be prohibitive foe the SSIs. There are provision (special and different provisions) intended to help developing countries. Article 5.8 of the agreement provides that the volume of dumped imports shall normally be considered negligible if dumped import from a particular country is found to be less than three percent of the imports like products. Unless countries which individually account for less than three percent of like products collectively account for more than 7 percent of imports. Due to lack of necessary data and problem of accessibility of information, NGOs, ministry of SSIA and RI and NSIC, etc., will need to play a pivotal role in this regard.

India should strengthen the domestic industry, more especially small scale industry, to enable it to face competition. It may be noted that the small scale

industry is likely to be hit the most by the unbridled opening up of the economy. A policy of gradual withdrawal of QRs and other tariff and non-tariff barriers would be in the interest of small industry. Simultaneously, the country has to provide infrastructural and credit support to SSI sector to enable it to squarely face the competition of world imports. In selected cases, it may be desirable to take advantage of the permissible limits to which tariff barriers can be raised in the interest of domestic industry. This shall provide breathing time to domestic industry. The subject matter of the present report pertain to this area of policy changes.

PRESENT STATUS OF THE SSI UNITS IN THE WTO SCENERIO The on going programme of Economic Reforms based upon the principle of liberalisation, globalisation and privatisation and the changes at the international economic scene including the emergence of World Trade Organisation (WTO), have brought certain challenges and several new opportunities before the SSI Sector. The most important challenge faced by the sector is that of growing competition both globally and domestically. A lot of products have already started coming to India without any restriction. At the same time sector has also been

facing some problems which relate to credit, infrastructure, technology, marketing, delayed payment hassels on account of so many rules and regulations etc. Hence, to survive and compete in the global market, the SSI units should manufacture quality products at competitive rates. To improve quality and productivity, the small scale industries are left with no other options but to throw away the obsolete technologies and adopt modern technologies that are available locally and internationally, duly adding quality testing and R & D facilities. In addition to this, the skills of the existing workers will have to be developed by providing necessary training to improve productivity.

OPPORTUNITY

The opportunities in the small-scale sector are enormous due to the following factors:

Less Capital Intensive Extensive Promotion & Support by Government Reservation for Exclusive Manufacture by small scale sector Project Profiles Funding - Finance & Subsidies Machinery Procurement Raw Material Procurement Manpower Training Technical & Managerial skills Tooling & Testing support Reservation for Exclusive Purchase by Government

Export Promotion Growth in demand in the domestic market size due to overall

economic growth

Increasing Export Potential for Indian products Growth in Requirements for ancillary units due to the increase in

number of greenfield units coming up in the large scale sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification. By its less capital intensive and high labour absorption nature, SSI sector has made significant contributions to employment generation and also to rural industrialisation. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. This is the opportune time to set up projects in the small-scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. This expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term co-existence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product/process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However, the bugbear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalisation coupled with Government support will therefore, attract the infusion of just these things in the sector.

Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

PROJECT REPORT

ON

ROLE OF S.B.I IN GRANTING LOAN TO AGRICULTURE SECTOR

Under the Supervision of: Dr. Roshan Lal Professor MM Institute of Management

Submitted By: Chirag Mittal Roll no. 1208251

MM Institute of Management MM University, Mullana, Ambala, Haryana, 133207

DECLARATION

I hereby declare that the project report entitled Role of S.B.I in granting loan to agriculture sector is the produce of my sincere effort. This Final Research Project Report is being submitted by me alone, at MMIM, Mullana (Ambala) for the partial

Maharishi Markandeshwar University,

fulfillment of the course BBA, and the report has not been submitted to any other educational institutions for any other Purpose.

Chirag Mittal

CERTIFICATE
Certified that the research project entitled Role of S.B.I in granting loan to agriculture sector is an original piece of work done by Mr. Chirag Mittal, Roll no 1208210 during the period of his study under my guidance for the award of the degree of Bachelor of Business Administration (BBA)

Date: Place:

Dr.

ROSHAN

LAL

PROFESSOR

ACKNOWLEDGEMENT

I would like to express deep sense of hearty and special gratitude to my faculty Guide Dr. ROSHAN LAL, Professor, MM Institute of Management, Maharishi Markandeshwar University, Mullana-Ambala for his valuable

suggestions and constant help and encouragement throughout the advancement of this project report. I am deeply indebted to Dr. ROSHAN LAL without whose help, stimulating suggestions and encouragement this project would not have seen the light at the end of the tunnel. Last but definitely not the least; I convey special thanks to all my colleagues for their morale boosting and valuable ideas.

CONTENTS
CHAPTER-1 INTRODUCTION INTRODUCTION OF BANKING AGRICULTURAL FINANCE IN INDIA ABOUT S.B.I SCHEMES OF AGRICULTURAL FINANCE CHAPTER-2 LITERATURE REVIEW CHAPTER-3 RESEARCH METHODOLOGY SCOPE OF THE STUDY RESEARCH DESIGN DATA COLLECTION METHODS RESEARCH OBJECTIVES LIMITATIONS OF STUDY CHAPTER-4 DATA ANALYSIS AND INTERPRETATION FINDINGS & SUGGESTIONS CONCLUSION BIBLIOGRAPHY QUESTIONAIRE 33-45 46 47

1-3 4-11 12-15 16-27 28-30 31-32

CHAPTER-1 INTRODUCTION OF BANKING


__________________________________________________________________ The world of banking has assumed a new dimension at dawn of the 21st century with the advent of tech banking, thereby lending the industry a stamp of universality. In general, banking may be classified as retail and corporate banking. Retail banking, which is designed to meet the requirement of individual customers and encourage their savings, includes payment of utility bills, consumer loans, credit cards, checking account and the like. Corporate banking, on the other hand, caters to the need of corporate customers like bills discounting, opening letters of credit, managing cash, etc.

Metamorphic changes took place in the Indian financial system during the eighties and nineties consequent upon deregulation and liberalization of economic policies of the government. India began shaping up its economy and earmarked ambitious plan for economic growth. Consequently, a sea change in money and capital markets took place. Application of marketing concept in the banking sector was introduced to enhance the customer satisfaction the policy of privatization of banking services aims at encouraging the competition in banking sector and introduction of financial services. Consequently, services such as Demat, Internet banking, Portfolio Management, Venture capital, etc, came into existence to cater to the needs of public. An important agenda for every banker today is greater operational efficiency and customer satisfaction. The mew watchword for the bank is pretty ambitious: customer delight.

The introduction to the marketing concept to banking sectors can be traced back to American Banking Association Conference of 1958. Banks marketing can be defined as the part of management activity, which seems to direct the flow of banking services profitability to the customers. The marketing concept basically requires that there should be thorough understanding of customer need and to learn about market it operates in. Further the market is segmented so as to understand the requirement of the customer at a profit to the banks.

DEFINITION OF BANK The Oxford dictionary defines the Bank as An establishment for the custody of money, which it pays out, on a customers order.

According to Whitehead A Bank is defined as an institution which collects surplus funds from the public, safeguards them, and makes them available to the true owner when required and also lends sums be their true owners to those who are in need of funds and can provide security. Banking Company in India has been defined in the Banking Companies act 1949, One which transacts the business of banking which means the accepting, for the purpose of lending or investment of the deposits of money from the public, repayable on demand, or otherwise and withdraw able be cheque, draft, order or otherwise.

The banking system is an integral subsystem of the financial system. It represents an important channel of collecting small savings form the households and lending it to the corporate sector. The Indian banking system has Reserve Bank of India (RBI) as the apex body for all matters relating to the banking system. It is the central Bank of India. It is also known as the Banker To All Other Banks. EVOLUTION OF INDIAN BANKING Ancient banking system of India constituted of indigenous bankers. They have been carrying on their age-old banking operations in different parts of the country under different names. The modern age of banking constitutes the fundamental basis of economic growth. The term Bank is being used since long time but there is no clear conception regarding its beginning. According to the viewpoint, in good old days. Italian money leaders were known asB anchi because they kept a special type of table to transact their business. IMPORTANCE OF BANKS Today banks have become a part and parcel of life. There was a time when dwellers of the city alone could enjoy their services. Now banks offer access to even a common man and their activities extend to areas hitherto untouched. Banks cater to the needs of agriculturalists, industrialists, traders and to all the other sections of the society. In modern age, the banking constitutes the fundamental basis of economic growth. Thus, they accelerate the economic growth of a country and steer the wheels of the economy towards its goals of self reliance in all fields. It naturally arouses ones interest in knowing more about the Bank and the various men and the activities connected with it.

AGRICULTURE FINANCE IN INDIA


Finance in agriculture is as important as development of technologies. Technical inputs can be purchased and used by farmer only if he has money (funds). But his own money is always inadequate and he needs outside finance or credit. Professional money lenders were the only source of credit to agriculture till 1935. They use to charge unduly high rates of interest and follow serious practices while giving loans and recovering them. As a result, farmers were heavily burdened with debts and many of them perpetuated debts. There were widespread discontents among farmers against these practices and there were instances of riots also. With the passing of Reserve Bank of India Act 1934, District Central Co-op. Banks Act and Land Development Banks Act, agricultural credit received impetus and there were improvements in agricultural credit. A powerful alternative agency came into being. Large-scale credit became available with reasonable rates of interest at easy terms, both in terms of granting loans and recovery of them. Although the co-operative banks started financing agriculture with their establishments in 1930s real impetus was received only after Independence when suitable legislation were passed and policies were formulated. There after, bank credit to agriculture made phenomenal progress by opening branches in rural areas and attracting deposits. Till 14 major commercial banks were nationalized in 1969, co-operative banks were the main institutional agencies providing finance to agriculture. After nationalization, it was made mandatory for these banks to provide finance to agriculture as a priority sector. These banks undertook special programs of branch expansion and created a network of banking services throughout the country and started financing agriculture on large scale. Thus agriculture credit acquired multiagency dimension. Development and adoption of new technologies and availability

of finance go hand in hand. In bringing "Green Revolution", "White Revolution" and now "Yellow Revolution" finance has played a crucial role. Now the agriculture credit, through multi agency approach has come to stay.

The procedures and amount of loans for various purposes have been standardized. Among the various purposes "Crop loans" (Short-term loan) has the major share. In addition, farmers get loans for purchase of electric motor with pump, tractor and other machinery, digging wells or boring wells, installation of pipe lines, drip irrigation, planting fruit orchards, purchase of dairy animals and feeds/fodder for them, poultry, sheep/goat keeping and for many other allied enterprises.

AGRICULTURE GROWTH RATE IN INDIA

Agriculture Growth Rate in India GDP had been growing earlier but in the last few years it is constantly declining. Still, the Growth Rate of Agriculture in India GDP in the share of the country's GDP remains the biggest economic sector in the country. India GDP means the total value of all the services and goods that are produced within the territory of the nation within the specified time period. The country has the GDP of around US$ 1.09 trillion in 2007 and this makes the Indian economy the twelfth biggest in the whole world. The growth rate of India GDP is 9.4% in 2006- 2007. The agricultural sector has always been an important contributor to the India GDP. This is due to the fact that the country is mainly based on the agriculture sector and employs around 60% of the total workforce in India. The agricultural sector contributed around 18.6% to India GDP in 2005.

Agriculture Growth Rate in India GDP in spite of its decline in the share of the country's GDP plays a very important role in the all round economic and social development of the country. The Growth Rate of the Agriculture Sector in India GDP grew after independence for the government of India placed special emphasis on the sector in its five-year plans. Further the Green revolution took place in India and this gave a major boost to the agricultural sector for irrigation facilities, provision of agriculture subsidies and credits, and improved technology. This in turn helped to increase the Agriculture Growth Rate in India GDP.

The agricultural yield increased in India after independence but in the last few years it has decreased. This in its turn has declined the Growth Rate of the Agricultural Sector in India GDP. The total production of food grain was 212 million tonnes in 2001- 2002 and the next year it declined to 174.2 million tonnes. Agriculture Growth Rate in India GDP declined by 5.2% in 2002- 2003. The Growth Rate of the Agriculture Sector in India GDP grew at the rate of 1.7% each year between 2001- 2002 and 2003- 2004. This shows that Agriculture Growth Rate in India GDP has grown very slowly in the last few years.

Agriculture Growth Rate in India GDP has slowed down for the production in this sector has reduced over the years. The agricultural sector has had low production due to a number of factors such as illiteracy, insufficient finance, and inadequate marketing of agricultural products. Further the reasons for the decline in Agriculture Growth Rate in India GDP are that in the sector the average size of the farms is very small which in turn has resulted in low productivity.

Also the Growth Rate of the Agricultural Sector in India GDP has declined due to the fact that the sector has not adopted modern technology and agricultural practices. Agriculture Growth Rate in India GDP has also decreased due to the fact that the sector has insufficient irrigation facilities. As a result of this the farmers are dependent on rainfall, which is however very unpredictable.

NATIONALISED BANKS
1. Allahabad Bank - offers the Kisan Credit Card and Kisan Shakti Yojana

Scheme. The Kisan Credit Card is a unique scheme for farmers through which they can draw a cash loan for crop production as well as domestic needs from the cardissuing branch within the sanctioned limit. The Kisan Shakti Yojana provides farm investment credit, as well as personal/domestic loans including repayment of debt to moneylenders. The permissible loan limit will be 50 per cent of the value of land or 5 times the net farm income, whichever is lower, less the outstanding amount, if any, in Agril. 2. Andhra Bank - provides facilities to farmers like AB Kisan Vikas Card, AB

Pattabhi Agricard, AB Kisan Chakra, rural godowns, agri clinics, agri service centres, self help groups and solar cookers. They also provide other schemes such as Kisan Sampathi, tractor financing, Kisan Green Card, Surya Sakhti and loans to dairy agents. 3. Bank of Baroda - offers farmers the Baroda Kisan Credit Card. It also has

schemes for the purchase of agricultural implements, heavy agricultural machinery like tractors, irrigation and other infrastructure. Bank of Baroda also finances the development of agri industries like horticulture, sericulture, fisheries, dairy and poultry. 4. Bank of India - has a Kisan Credit Card Scheme that helps farmers raise

short-term funds for agriculture and other farm-based activities, on an on-going basis, with very flexible and friendly repayment terms. It also offers an agricultural loan for development of agriculture related industries, purchase of machinery and other agricultural purposes.

5.

Bank of Maharashtra - offers agriculturists a Mahabank Kisan Credit Card

and financial schemes for digging new wells, purchasing harvesters, livestock, vehicles and land. Repayment terms for different agricultural loans range from three to fifteen years. 6. Canara Bank - provides Kisan Credit Cards. Limits up to 50,000 have no

margin while those above 50,000 have a margin of 15 to 20 percent. Other than this, Canara Bank provides a wide array of financial schemes for different agricultural purposes. 7. Central Bank of India - The Central Kisan Credit Card is a credit service

provided to farmers on the basis of their holdings for purchasing agricultural inputs. Only those farmers having a good track record for the past 2 years with the bank as a borrower or depositor and who are not defaulters to any credit institution would be considered for loans. 8. Corporation Bank - offers a range of loan schemes to farmers. They are the

Corp Gram Mitra Yojana, Corp Arthias Loan Yojana, Corp Kisan Tie-Up Loan Scheme, Corp Kisan Farm Mechanisation Scheme and Corp Kisan Vehicle Loan Yojna. 9. Dena Bank - Dena Bank has sponsored 2 Regional Rural Banks namely

Dena Gujarat Gramin Bank in Gujarat and Durg Rajnandgaon Gramin Bank (DRGB) in Chhattisgarh. The bank has set up a Rural Development Foundation for training unemployed youth in rural areas. Other financial schemes of the bank are the Dena Swacch Gram Yojana, Dena Kisan Gold Credit Card Scheme and the Dena Bhumiheen Kisan Credit Card Scheme.

10.

Indian Bank - has a wide range of schemes for agriculturalists such as

Swarojgar Credit Card, Gramin Mahila Sowbhagya Scheme, Kisan Bike Loan Scheme, Yuva Kisan Vidya Nidhi Yojana and Indian Bank Kisan Card Scheme. 11. Indian Overseas Bank - offers agri business consultancy services that

include conducting feasibility and market studies, preparation of detailed project reports and formulation of rehabilitation packages for sick agro units. 12. Oriental Bank of Commerce - It has two agricultural projects - the

Grameen Project and the Comprehensive Village Development Programme. The Grameen Project involves disbursing small loans ranging from Rs. 75 onwards to mostly women. Training is also provided in villages in using locally available raw material to produce pickles and jams. The Comprehensive Village Development Programme focuses on providing an integrated package of rural finance to villagers to build up their village. 13. Punjab and Sind Bank - offers a range of financial schemes for farmers

like the Zimidara Credit Card, tractor finance scheme, drip irrigation scheme, Kheti Udyog Khazana Yojana, vermi composting scheme, horticulture clinic and private veterinary clinic with dairy unit scheme. 14. Punjab National Bank - This bank has a special website called PNB Krishi

for agriculturalists. It gives details on crop practices, plant protection, farm machinery, market prices and other farming news and activities. The website also provides a list of financial schemes offered by Punjab National Bank on production credit, investment credit, composite loans, animal husbandry and farm mechanization. 15. Syndicate Bank - offers a wide range of agricultural loan products such as

the Synd Jai Kisan Loan Scheme, Jewel Loan Scheme for Agriculture, Syndicate

Farm House Scheme, Finance for Hi-tech Agriculture, Development of Irrigation Infrastructure scheme, Syndicate 2/3/4 Wheelers Scheme and the Syndicate Kisan Credit Card (S.K.C.C). 16. UCO Bank - This Bank provides the UCO Hirak Jayanti Krishi Yojana to

meet the long-term credit needs of the farming community in rural areas for agriculture, allied activities as well as for personal purposes. Only farmers below 60 years are eligible to apply. Minimum quantum of the loan is Rs. 25,000/- and the maximum is Rs. 5 lakhs. 17. Union Bank of India - Facilities provided to farmers include Kisan ATM

Cards and special Kisan ATM Machines. These ATM's are easy to operate and do not require farmers to have a high level of literacy. They are voice enabled in the local language, have a touch screen monitor and work on a bio-metric authentication system like finger print verification. 18. United Bank of India - The range of financial schemes offered to

agriculturalists include the United Krishi Laghu Paribahan Yojana, United Krishi Sahayak Yojana, United Gramyashree Yojana, Gramin Bhandaran Yojana and the United Bhumiheen Kisan Credit Card. 19. Vijaya Bank - This bank offers one comprehensive financial scheme known

as the Vijaya Krishi Vikas (VKV) Scheme. This scheme provides a simple package to farmers to meet entire agricultural credit requirements such as crop production, investment credit and consumption credit. All farmers including owners, tenant cultivators, leased land farmers and sharecroppers are eligible for this scheme.

SCHEMES FOR AGRICULTURE FINANCE


1. SBT KISAN GOLD CARD SCHEME (General purpose Agriculture Term Loan)
ELIGIBILITY

a. b.

Farmers having good track record of repayment for the last two years. Farmers who have closed their loan account without default and not our current borrowers.

c.

Farmers who have defaulted in repayment but closed the Loan within the stipulated repayment period.

d. e.

Farmers who are maintaining deposits with the Bank. Good borrowers of other banks provided they liquidate their dues with other banks.

f.

Good farmers who have not availed loans from any bank.

PURPOSE The borrower is at liberty to utilize 50% of the amount for any purpose, including consumption purpose and purchase of land.
AMOUNT OF LOAN

The amount of loan is limited to five times the annual farm income including income from allied activities or 50% of the value of the land offered as collateral security, whichever is less, subject to a maximum of Rs.10 lakh.

RATE OF INTEREST

Interest rate ranges from 1% below PLR. SECURITY Hypothecation of crops and assets, if any, created out of bank finance and existing movable assets such as milch animals, pump sets etc. The loan will be secured by equitable mortgage of properties worth double the loan amount, or term deposit receipts, LIC policies of adequate surrender value, NSCs completed lock in period or more etc. DISBURSEMENT Cash disbursals are allowed to the full extent of the credit limit. REPAYMENT The repayment period shall be 10 years. The due date of the instalment shall be fixed in such a way to coincide with the date of generation of income. 2. KISAN CREDIT CARD SCHEME ELIGIBILITY All agriculturists who are in need of short term production requirements. ATM facility and Personal Accident Insurance Scheme for life up to Rs.50000/- and permanent disability cover up to Rs.25000/- is available on request.
PURPOSE

To provide hassle free short-term credit to farmers on the basis of their land holdings for purchase of inputs and draw cash to meet their production needs. i.e. Cultivation expenses including allied activities with a consumption component.

AMOUNT OF LOAN

To be fixed on the basis of operational holdings and scale of finance with consumption component 15% (maximum Ra.10000/-) of production credit. The scale of finance to farmers who own cultivated land below one acre will be at the rate of Rs.40000/- (on pro rata basis) and farmers who own more than one acre with intensive farming of land be given at the rate of Rs.37500/- per acre and part thereof. RATE OF INTEREST Interest rate ranges from 2.50% below to 1.50% above BPLR for various limits.

REPAYMENT Running Cash Credit account for 36 months subject to annual review and total annual credit should exceed annual debit.

3. HOMESTEAD FARMING PURPOSE A scheme for financing farmers practicing mixed cropping / inter cropping along with allied activities to enable them to undertake cultivation of various crops in a more integrated way. The scheme provides the farmers with sufficient working capital required for their homestead farming (Mixed cropping along with allied activities) by fixing scale of finance based on land holding to meet the cost of entire farming activities.

AMOUNT OF LOAN

The farmers who own cultivated land below one acre be given the scale of finance on pro rata basis at the rate of Rs.40000/- and farmers who own more than one acre of land be given at the rate of Rs.37500/- per acre and part thereof.

RATE OF INTEREST Interest rate ranges from 2.50% below to 1.50% above BPLR for various limits.

REPAYMENT The facility will be sanctioned as an Agriculture Cash Credit limit (In case of Kisan Credit Card running cash credit).

4. LOAN FOR ESTATE PURCHASE ELIGIBILITY The estate should be either in yielding stage with the crops in its prime yield age or capable of being developed in to a viable unit. The yield / net income of the estate should be sufficient to liquidate the proposed loan and interest accrued with in a period of 7 to 10 years. The proposed estate should be free from encumbrance and entire property should be offered as security to the loan.

PURPOSE To encourage those who prefer to settle down in agriculture and are in the look out of good / viable estates for purchase and also to improve production in agriculture.

AMOUNT OF LOAN

The quantum of loan that will be considered for sanction will be 75% of the registered value or 50% of the market value whichever is low. In exceptional cases 80% of the registered value or 50% of the market share whichever is low is also considered. The loan for the development of the estate like land development including working capital can also be sanctioned.

RATE OF INTEREST Interest rate same as BPLR

REPAYMENT Repayment of loan will be in quarterly/half yearly / yearly instalments depending on the harvest of the crops and the loan shall be repaid within a maximum period of 7 to 10 years.

5. SCHEME FOR FINANCING FARMERS FOR PURCHASE OF LAND FOR AGRICULTURAL PURPOSES ELIGIBILITY
Small and Marginal farmers - land maximum upto 5 acres of non-irrigated land or 2.5 acres of irrigated land including the land purchased under the scheme. Tenant, sharecropper and landless agricultural labourers with a good record of prompt repayment of our loans for the last 2 years are also eligible.

PURPOSE To finance small and marginal farmers, share croppers, tenant cultivators for purchasing land to expand activities and to make existing small and marginal units economically viable to bring fallow lands and waste lands under cultivation to step up agricultural production as well as productivity also to finance share croppers /

tenant farmers to enable them to diversify farming activities to allied areas to increase their income.

AMOUNT OF LOAN Maximum loan under the scheme towards land cost shall not exceed Rs 5 lakh. Cost of development/economic activity shall be financed under the banks other financing schemes.

RATE OF INTEREST Interest rate ranges from 1.75% below to 2.00% above BPLR for various limits.

REPAYMENT Repayment of the loan will be 7 to 12 years in half yearly / yearly installments with maximum of 24 months moratorium period. Gestation period / repayment due dates etc will be fixed according to income generation from the activity.

6. SCHEME FOR CULTIVATION OF MEDICINAL PLANTS ELIGIBILITY All agriculturists are eligible.

PURPOSE Scheme for financing cultivation of 22 medicinal plants cultivated extensively and also in great demand in the local as well as foreign market.

AMOUNT OF LOAN Depending on the area of cultivation / project cost

RATE OF INTEREST Interest rate ranges from 1.75% below to 2.00% above BPLR for various limits.

REPAYMENT Repayment should coincide with harvesting and marketing or at the time generation of income from the scheme.

7. SCHEME FOR CULTIVATION OF VANILLA ELIGIBILITY All agriculturists are eligible.

PURPOSE Scheme for financing cultivation of Vanilla, a cash crop, gaining ground in the State of Kerala.

AMOUNT OF LOAN Amount of finance will be Rs.250000/- per hectare for pure crops and Rs.210000/per hectare for intercrop.

RATE OF INTEREST Normal rate of interest as applicable to ATL

REPAYMENT The loan shall be repaid within a period of 7 years, in yearly instalments. Farmers eligible for two years gestation period and interest is repayable on the 3rd and 4th year and the principal from the 5th to 7the year.

8. SBT RAIN WATER HARVESTING SCHEME ELIGIBILITY Farmers having land holding of 0.50 acre or more are eligible to be considered for finance under this scheme.

PURPOSE Scheme envisages construction of low cost tanks for collecting and storing rainwater and using it for irrigation, by siphon arrangement, utilizing gravitation flow or by installing motor pump.

AMOUNT OF LOAN Maximum amount of finance will be Rs.88000/- per acre. Scheme can be adopted in smaller areas also by reducing the cost proportionately.

RATE OF INTEREST Interest rate ranges from 1.75% below to 2.00% above BPLR for various limits.

REPAYMENT Repayment based on the income generated from the crops raised and and cropping pattern. The maximum period eligible for repayment is 8 years in annual installments.

9. PRODUCE MARKETING LOAN (Advance against Warehouse Receipt)

ELIGIBILITY

a. Farmers / traders depositing farm produce in the warehouses of the central / state warehousing corporations. a. Scheme will be operative in Karnataka, Andhra Pradesh, Tamilnadu & Kerala.

PURPOSE a. To protect the farmers from the compulsion to sell their produce immediately after harvest of produce despite an adverse market. b. To finance farmers and traders against warehouse receipt.

AMOUNT OF LOAN 70% of the value of the warehouse receipt, valued at the market value or 70% of the market price advised by Agri. Dept, HO whichever is less.

RATE OF INTEREST Farmers Up to Rs.3 lakh - 3.50% below PLR 9.50% Above Rs.3 lakh - 2.50% below PLR 10.50% Traders 2.50% below PLR 10.50% (Irrespective of the limit)

REPAYMENT On demand / 6 months which can be extended up to 12 months subject to satisfactory shelf life / market condition.

10. AGRI. LOAN TO NON-RESIDENT INDIANS

ELIGIBILITY Agricultural advances are available to the resident family members (means spouse, father, mother, brother, sister etc.) of Non-Resident Indians for land-based activities in respect of the land held by them in India subject to: a. The loan should be need based and the total land holding of the Non-Resident Indian, in individual name or jointly with others, should not exceed 5 ha. b. The loan amount shall not be used for acquiring any additional land.

PURPOSE To finance farmers only for land-based activities and to carryon agricultural activities on the existing land.

AMOUNT OF LOAN The maximum amount of the loan will be need based.

RATE OF INTEREST Interest rate ranges from 2.50% below to 1.50% above BPLR for various shortterm limits and from 1.75% below to 2.00% above BPLR for various long-term limits. REPAYMENT The loan can be repaid out of the income generated from the agricultural activities or remittances from abroad or by debit to their NRE/NRO/FCNR accounts.

11. MINOR IRRIGATION Projects with cumulative command area of less than 2000 ha are called minor irrigation projects ELIGIBILITY

The beneficiary should have a minimum of 50 cents of land to be brought under irrigation to ensure viability and repayment of loan.

PURPOSE Scheme for developing irrigation potential, Minor Irrigation, Installation of Pump set Drip Irrigation etc.

AMOUNT OF LOAN As per the project submitted.

RATE OF INTEREST Interest rate ranges from 1.75% below to 2.00% above BPLR for various limits.

REPAYMENT The loan shall be repaid within a period of 9 years, in yearly instalments.

12. FARM MECHANISATION Loan for Farm Mechanisation, Purchase of tractors, Power Tillers, etc. ELIGIBILITY a. Tractors with engine capacity up to 35 HP The applicant should own / cultivate six acres of perennially irrigated land. b. Tractors with engine capacity above 35 HP The applicant should own / cultivate eight acres of perennially irrigated land. c. Power Tillers the applicant should own / cultivate four acres of perennially irrigated land.

PURPOSE

To purchase tractor / power tillers for agricultural activities.

AMOUNT OF LOAN Amount of advance will be the investment cost of tractor / power tiller and implements less margin @15%.

RATE OF INTEREST Interest rate ranges from 1.75% below to 2.00% above BPLR for various limits.

REPAYMENT The period of repayment shall be 9 years for tractors and 7 years for power tillers.

STATE BANK OF INDIA


State Bank of India (SBI) is the largest state-owned banking and financial services company in India. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 16,000 branches, has the largest banking branch network in India.Its also considered as the best bank even abroad ,having around 130 branches overseas [including 1 ADB]and one of the largest financial institution in the world . With an asset base of $352 billion and $285 billion in deposits, it is a regional banking behemoth. It has a market share among Indian commercial banks of about 20% in deposits and advances, and SBI accounts for almost one-fifth of the nation's loans. The State Bank of India is the 29th most reputed company in the world according to Forbes.[3] Also SBI is the only bank to get featured in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010.

The State Bank of India is the largest of the Big Four of India, along with ICICI Bank, Punjab National Bank and HDFC Bankits main competitors. and" GUINNESS BOOK OF WORLD RECORD " that 56 million transactions happening per day all over the world is definitely an achievement
History

State Bank of India Mumbai Main Branch. The roots of the State Bank of India rest in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock companies, and were the result of the royal charters. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they retained until the formation of the Reserve Bank of India. The Presidency banks amalgamated on 27 January 1921, and the reorganized banking entity took as its name: Imperial Bank of India. The Imperial Bank of India remained a joint stock company Pursuant to the provisions of the State Bank of India Act (1955), the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955, the Imperial Bank of India became the State Bank of India.

Associate banks

SBI has five associate banks:


State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore State Bank of Saurashtra - merged with SBI in 2008. State Bank of Indore - merged with SBI in 2010.

Earliar SBI had only seven associate banks that, with SBI, constitute the State Bank Group. All use the same logo of a blue keyhole and all the associates use the "State Bank of" name, followed by the regional headquarters' name. Originally, the then seven banks that became the associate banks belonged to princely states until the government nationalised them between October 1959 and May 1960. In tune with the first Five Year Plan, emphasizing the development of rural India, the government integrated these banks into the State Bank of India to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline operations. The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra merged with SBI, reducing the number of state banks from seven to six. Then on 19 June 2009 the SBI board approved the merger of its subsidiary, State Bank of Indore, with itself. SBI holds 98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the balance of 1.77%.)

The acquisition of State Bank of Indore added 470 branches to SBI's existing network of 12,448 and over 21,000 ATMs. Also, following the acquisition, SBI's total assets will inch very close to the Rs 10-lakh crore mark. Total assets of SBI and the State Bank of Indore stood at Rs 998,119 crore as on March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the SBI Indore Branches started functioning as SBI branches on 26 August 2010. IVR (Interactive Voice Recording)

State Bank of India Mumbai LHO.


Branches of SBI

State Bank of India has 131 foreign offices in 32 countries across the globe. SBI has about 21,000 ATMs; and SBI group(including associate banks) has about 45,000 ATMs.

SBI has 26,500 branches, including branches that belong to its associate banks.

SBI includes 99345 oficces in our country.

CHAPTER-2 REVIEW OF LITERATURE

_____________________________________________
1)

Mittal, Arun, (2006),Advertising appeal is the method used to draw the attention of consumers and to influence their feelings toward the product, service, or cause. There are hundreds of different appeals that can be used as the foundation for advertising messages. These are the central idea of an ad which has been used to catch the attraction of customer by heart. The theme of a commercial strikes a person in depth and forces him/her to act in the desired manner. Generally advertising appeals are broken into two categories: rational appeals and emotional appeals.

Uses of Appeals in Banking Services Advertising: Name Bank of Broad Category Personal/Social Marketing Approach Security and Future Because your dreams are benefit Differentiation not only yours. In years a player comes who change the way the game is played. Rational Practical Customization Service Offering IDBI Rational Practical of Not two people are the same Theme/Punch Line

Union Bank Emotional Social/Parental of India Appeal Affection

Royal Bank Emotional Personal/Style of Scotland Appeal Group HSBC

Comprehensiveness Banking for All of Services offering

State

Bank Emotional Personal/Reliability Supporting Security customers

the With you all the way

of India

2)

Traditional service quality

During the past few decades, the widely acknowledged importance of service quality resulted in numerous attempts by researchers, practitioners and managers, aimed at its conceptualization and measurement. However, this has been proven to be a difficult task, causing long-lasting debates among those involved, mainly due to the intangible nature of services and problems stemming from the simultaneous production and consumption of a service (Carman, 1990). Despite this controversy, it can be argued that there is a convergence towards the Parasuraman et al. (1988, p. 16) view that customer perceived service quality, is a global judgment or atti tude, relating to the superiority of the service. Several measuring instruments have been developed, aiming to capture and explain the service quality dimensions. There is little doubt that, among these, SERVQUAL is the most popular, a fact acknowledged even by its critics (e.g. Asubonteng et al., 1996). SERVQUAL has been developed in a series of stages leading to consecutively more rened versions (Parasuraman et al., 1985, 1988, 1991, 1994). In the most commonly used version (Parasuraman et al., 1988), service quality is calculated as the gap between customer expectations and perceptions. The 22 items of this instrument are categorized into: Reliability: The ability to perform the promised service dependably and accurately. Tangibles: The appearance of physical facilities, equipment, personnel and communications materials. Responsiveness: The willingness to help customers and to provide prompt service. Assurance: The knowledge and courtesy of employees and their ability to convey trust and condence. Empathy: The provision of caring, individualised attention to customers.

3)

Service quality and satisfaction

There is very little doubt that there is a causal relationship between customer perceived service quality and satisfaction. Nevertheless, there is an ongoing debate in literature on the direction of Total Quality Management 227this relationship, i.e. whether service quality inuences satisfaction or vice versa. According to Parasuraman et al. (1988), perceived service quality relates to long-term and global evaluation of a service, whereas satisfaction is linked to evaluations of specic service transactions. They pointed out those incidents of customer satisfaction from their experiences with the provided service inuence the perceptions of service quality. On the other hand, other researchers (e.g. Cronin & Taylor, 1992; Spreng &McKoy, 1996) have found that service quality is an antecedent of customer satisfaction. Parasuraman et al. (1994) moderated this disagreement by attributing the different perspectives on this issue to the global scope of perceived service quality as opposed to the transaction-oriented nature of satisfaction. Research on the relationship between quality and satisfaction in the internet services context is again at its early stages. However, several scholars advocate that customerperceived internet service quality, either overall or specic dimensions, signicantly inuences customer satisfaction (e.g. Jun et al., 2004; Lee & Lin, 2005; Long &McMellon, 2004; Van Iwaarden et al., 2003.

RESEARCH METHODOLOGY

This chapter describes the research methodology adopted to achieve the objectives of the study. It includes the scope of the study, research design, collection of data, analysis of data and limitations of the study. Scope of the study The scope of the study is to get the first hand knowledge about the role of SBI in granting role to agriculture sector. The scope is restricted to study the factors affecting the perception and behaviour satisfaction of consumers while availing the agriculture loan services in banks. This is done to avoid perceptual bias and for providing objectivity to the study. Research Design The research design constitutes the blueprint for the collection, measurement and analysis of data. It is the strategy for a study and the plan by which the strategy is to be carried out.

Data Collection Methods Primary Data


Primary data is that data which is collected for the first time. It is original in nature in the shape of raw material. For the purpose of collection of primary data, a well structured questionnaire was framed which was filled by the respondents. The questionnaire comprises of close ended questions. In close ended questions dichotomous, ranking, nominals scale, checklist questions and multiple choice questions are used.

Sampling design: Sample size: 50 people who have taken any type of agriculture loan were surveyed.,

Sampling Area: Ambala Sampling technique: a probability sampling technique named stratified sampling has been used in the research. The Chief Objectives of this study are: 1. To find out the Role played by SBI in upliftment of farmers in India. 2. The system and procedure of granting Loans to Farmers. 3. To analyze the benefits of Loans to Farmers

Limitations of the study

Sincere efforts have been made to collect authentic and reliable information from respondents, however the report is subject to following limitations: i. Some respondents were reluctant to give the information, so their responses may be biased. ii. Study was conducted in Ambala only. So the results of the study may not be applicable in other areas. iii. The factors which are taken in this research is not only the base to judge the consumer behavior, some other psychological factors may slightly impact on the same.

CHAPTER-4 DATA ANALYSIS AND INTERPRETATION

4.1 Analysis of granting agriculture loan Reply of Respondents Yes No 50 20 No. of Respondents

(Source: Self prepared Questionnaire & Field Survey)

29%

Yes No

71%

Interpretation: Table 4.1 shows the analysis of granting agriculture loan. It shows that 71Percent of Respondents were knowing about agriculture loan facilities. Only 29 Percent respondents were not aware about loan facilities. It is reveals that majority of the respondents were aware regarding agriculture loan facilities.

4.2 Analysis about which financial institution or Bank people prefer Reply of Respondents No. of Respondents

SBI Co-operative Bank Agricultural bank Any other

12 8 20 10

20%

24%
SBI Co-operative Bank Agricultural bank

16% 40%

Any other

Interpretation Agricultural banks are most preferred by the customers. The banks specialize for the needs of the agricultural community and are usually based near their place. After this SBI and associate banks are preferred because they also have tailor made loans for them. Co-operative banks are also preferred due to their low rate of interest. For various types of loans, the interest rates are satisfactory for most of the respondents. 24% of the respondents that the interests rates are higher in comparison to other lenders like agriculture or co-operative banks.

4.3

Analysis of from where get information about Agricultural loans

Reply of Respondents Televisions Radios Public meetings Newspapers Any Other 3 4 28 7 8

No. of Respondents

6% 8% 16% 14%
Televisions Radios Public meetings Newspapers

56%

Any Other

Interpretation Public meetings like panchayats, meting with friends peers and fellow farmers and camps like loan mela etc are the best source of information for the consumers. Newspapers is better source of information than radio and television about the loans.

4.4

Analysis of for how much loan you applied for

Reply of Respondents 1-5 Lacs 5-10 Lacs 10 Lacs and above 28 16 6

No. of Respondents

12%
1-5 Lacs

32%

5-10 Lacs

56%

10 Lacs and above

Interpretation

In most of the cases, a loan of 1-5 lacs is applied by the consumers. There are very few takers of loans above Rs 10 lacs.

4.5

Analysis of reason for Loan

Reply of Respondents Farming tools (thresher, tractor etc) Seeds Pesticides, Fertilizers, etc Any other 33 5 8 4

No. of Respondents

8%
Farming tools (thresher, tractor etc)

16%
Seeds

10% 66%

Pesticides, Fertilizers, etc Any other

Interpretation In most of the cases, a loan is taken to buy farming tools like thresher , tractor etc.

4.6

Analysis of satisfaction with the procedure of the bank in granting loan

Reply of Respondents Yes No 39 11

No. of Respondents

22%
Yes No

78%

Interpretation

39 of the total 50 respondents were satisfied with the procedure of bank loan.

4.7 Analysis of satisfaction with the behavior of employees

Reply of Respondents Yes No 36 14

No. of Respondents

28%
Yes No

72%

Interpretation 36 of the total 50 respondents were satisfied with the behaviour of bank employees. The bank employees are generally courteous to the respondents.

4.8

Analysis of liking with the ambience of the bank

Reply of Respondents Yes No 13 37

No. of Respondents

26%
Yes No

74%

Interpretation 37 of the total 50 respondents were satisfied with the ambience of bank

4.9

Analysis of problems encountered in receiving loan.

Reply of Respondents No Yes i) ii) iii) Documentation problems Guarantee problems Any Other 22 28 18 8 2

No. of Respondents

44%
Yes No

56%

Interpretation 28 of the total 50 respondents encountered problems while taking loan. In most of these cases, documentation was a major problem since the farmers are generally not very literate and hardly maintain documents.

4.10 Analysis of if loan brought charges in farming technique

Reply of Respondents Yes No 46 4

No. of Respondents

8%

Yes No

92%

Interpretation After taking loans, the farmer community is able to improve their farming techniques as responded by 92% of the respondents.

4.11 Analysis of satisfaction over the fact that S.B.I. takes 8.5-12.5% of interest rate on agricultural loan.

Reply of Respondents Yes No 38 12

No. of Respondents

24%
Yes No

76%

Interpretation The S.B.I. rating regarding agriculture loans is satisfactory, Only 12% of the respondents were not satisfied by the bank.

4.12 Liking of taking agricultural loan again

Reply of Respondents Yes No 50 0

No. of Respondents

0%

Yes No

100%

Interpretation All the respondents had a positive feedback about taking a loan again and there was not even a single respondent who replied in negative to the question.

4.13 Analysis of rating of SBI Reply of Respondents Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied 8 20 16 4 2 No. of Respondents

4% 8% 16%
Highly Satisfied Satisfied Neutral

32% 40%

Dissatisfied Highly Dissatisfied

Interpretation The S.B.I. rating regarding agriculture loans is satisfactory, Only 12% of the respondents were not satisfied by the bank.

FINDINGS AND SUGGESTIONS

Agricultural banks are most preferred by the customers. The banks specialize for the needs of the agricultural community and are usually based near their place. After this SBI and associate banks are preferred because they also have tailor made loans for them. Co-operative banks are also preferred due to their low rate of interest. Public meetings like panchayats, meting with friends peers and fellow farmers and camps like loan mela etc are the best source of information for the consumers. Newspapers is better source of information than radio and television about the loans. In most of the cases, a loan of 1-5 lacs is applied by the consumers. There are very few takers of loans above Rs 10 lacs. After taking loans, the farmer community is able to improve their farming techniques as responded by 92% of the respondents. For various types of loans, the interest rates are satisfactory for most of the respondents. 24% of the respondents that the interests rates are higher in comparison to other lenders like agriculture or co-operative banks. All the respondents had a positive feedback about taking a loan again and there was not even a single respondent who replied in negative to the question.

The S.B.I. rating regarding agriculture loans is satisfactory, Only 12% of the respondents were not satisfied by the bank.

CONCLUSION

Banks play an important role in the improvement in agriculture sector. It is a duty of government and banks to support the agriculture sector.

SBI takes a lot of initiative in providing loan facilities to the sector. Various schemes are available for the farmers at very attractive interest rates.

Agricultural banks, which are especially meant for the purpose of extending loans to the farmers are preferred over other options. Still SBI is able to have a mark.

The employees are generous in behaviour and have goof\d rapport with the farmers, thereby have the confidence of the farmers. The farmers face some difficulties over the issue of loan documentation.

Bad debts deter the banks in providing loans to farmers.

BIBLIOGRAPHY 1. Pal Debdatta & Sapre Amey, How have Government Policies Driven Rural Credit in India: A Brief Empirical Analysis, 1969-2009, IIMA, India, Research and Publications, W.P.N 2010-12-02, December 2010, pp. 1-15. 2. Lekhi RK & Singh Joginder Agricultural Economics- An Indian Perspective, Kalyani Publishers, New Delhi, 2010, pp.248-297. 3. Dutt Ruddar & Sundharam KPM, Indian Economy, S. Chand & Company Ltd, New Delhi, 2009, pp. 490-519, 577-609. 4. Pratoyogita Darpan, Exam Oriented Series 1, Indian Economy, 2007-08, pp. 9495. 5. Golait Ramesh, Current Issues in Agriculture Credit in India: An Assessment, Reserve Bank of India, Occasional Papers, Vol. 28, No.1, Summer 2007, pp. 79-89. 6. Sriram MS Productivity of Rural Credit: A Review of Issues and Some Recent Literature, IIMA, Research & Publications, W.P.No.2007-06-01, June 2007, pp. 1-20. 7. Kaur Janmeet & Kiranvir, Regional Rural Banks and Credit Flow to Agriculture, in R. K. Uppal & Rimpi Kaur (ed.), Banking in the New Millennium- Issues, Challenges and Strategies, Mahamaya Publishing House, New Delhi, 2007, pp. 90-102. 8. Mohan Rakesh, Agricultural Credit in India- Status, Issues and Future Agenda, Economic and Political Weekly, Vol. XLI, No. 11, March 18-24, 2006, pp. 1013-1023. 9. Gulati Ashok & Bathla Seema, Institutional Credit to Indian Agriculture: Defaults and Policy Options, National Bank for Agriculture and Rural Development Mumbai, Occasional Paper 23, 2002, pp. 1-55.

10.RBI, Report on Currency and Finance, 2006-08, Reserve Bank of India, Mumbai 11.RBI, Report on Trends and Progress of Banking in India, 2008-09, Reserve Bank of India, Mumbai. 12.RBI, Statistical Tables Relating to Banks in India, 2008-09, Reserve Bank of India, Mumbai. 13.RBI, Handbook of Statistics on Indian Economy, 2009-10, Reserve Bank of India, Mumbai. 14.Government of India, Economic Survey of India, 2009-10, New Delhi. 15.www.sbi.com 16.www.google.com 17.www.wikipedia.com 18.Business World 19. Business Today

QUESTIONNAIRE
Q.1 Have you ever taken agricultural loan? Yes No From which financial institution or Bank? SBI Co-operative Bank Agricultural bank Any other How do you get information about Agricultural loans? Televisions Radios Public meetings Newspapers Any Other for how much loan do you applied for? 1-5 Lacs 5-10 Lacs 10 Lacs and above The reason for Loan Farming tools (thresher, tractor etc) Seeds Pesticides, Fertilizers, etc Any other Are you satisfied with the procedure of the bank in granting loan? Yes No

Q.2

Q.3

Q.4

Q.5

Q.6

Q.7

Are you satisfied with the behavior of employees? Yes No Q.8 Do you like the ambience of the bank? Yes No Q.9 have you encountered any problem in receiving loan.? No 22 Yes 28 iv) Documentation problems 18 v) Guarantee problems 8 vi) Any Other 2

Q.10

Q.11

Dos loan benefits bring charges in your farming technique? Yes No S.B.I. takes 8.5-12.5% of interest rate on agricultural loan, are you satisfied with this?

Q.12

Yes No

Would you like to take agricultural loan next time? Yes No How many times do you taken loan 1 2 3 Many Never How will you rate SBI Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied

Q.13

Q.14